Days Inventory Outstanding

Days inventory outstanding measures how many days inventory is held before it is sold.

Days inventory outstanding, or DIO, measures how long inventory stays on hand before it is sold.

Formula

DIO = Average inventory / Cost of goods sold x Days in period

DIO is one part of the cash conversion cycle. It should be interpreted with industry norms, product shelf life, and supply-chain risk. Compare DIO inside the full cycle with cash conversion cycle benchmarks by industry.

Related calculator: Days Inventory Outstanding Calculator.