Days Inventory Outstanding (DIO)
Days Inventory Outstanding (DIO) is a working capital management metric that measures the average number of days a company holds onto its inventory before selling it. In other words, it tells you how long it typically takes for your inventory to be converted into cash through sales.
Reporting and Analytics
What is Days Inventory Outstanding (DIO)?
Days inventory outstanding (DIO), also sometimes referred to as Days Sales of Inventory (DSI) or Days in Inventory (DII), measures the average number of days a company holds inventory before selling it. It’s calculated by dividing the average inventory by the cost of goods sold (COGS) and then multiplying by the number of days in the period. A lower DIO indicates efficient inventory management and quicker turnover of goods.
