HOMEPAGE

Days Inventory Outstanding (DIO)

Definition

DIO measures how long inventory sits before being sold.

$$\text{DIO}=\frac{\text{Average Inventory}}{\text{COGS}}\times 365$$

Why It Matters

• Indicates inventory efficiency.
• High DIO = slow turnover.
• Low DIO = strong demand or efficient operations.

Example

Average Inventory = $50M COGS = $300M

$$\text{DIO}=\frac{50}{300}\times 365=60.8\text{days}$$