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Inventory · Definition

Days Inventory Outstanding

The average number of days stock is held before it is sold.

DIO (also called Days Sales of Inventory) expresses inventory turnover as a number of days. It tells you, on average, how long capital sits in stock before being sold.

Lower is usually better for cash flow, but the ideal varies sharply by industry and product shelf life.

How it is calculated

DIO = (Average inventory ÷ COGS) × 365

The inverse view of inventory turnover.

Also called

  • days sales of inventory
  • DSI

Related terms

Inventory Turnover

How many times inventory is sold and replaced over a period.

Cost of Goods Sold

COGS

The direct cost of the products a business sold in a period.

Carrying Cost

The total cost of holding inventory over time.

More in Inventory

ABC Analysis Asset Tracking Available to Promise (ATP) Backorder Barcode Consignment Inventory Cycle Count Cycle Stock

Days Inventory Outstanding is not just a definition here

Inventory runs on this vocabulary every day in AWRA OpsHub — 44 of our 257 glossary terms describe things the platform actually does.

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