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Find out how many days it takes, on average, to sell through your inventory.
Days inventory outstanding (in days)
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What is
Days inventory outstanding (DIO) measures the average number of days a business holds inventory before selling it. The formula uses average inventory, cost of goods sold, and the length of the period being measured to show how quickly stock moves. A lower DIO means inventory turns into sales faster, while a higher DIO means stock sits longer before it sells.
What you need to know about DIO:
DIO uses average inventory, cost of goods sold, and the number of days in a period to calculate turnover speed.
A falling DIO across several periods often signals stronger demand or a tighter inventory management process.
Retailers and manufacturers compare DIO against industry benchmarks to judge how efficiently stock is managed.
How to calculate days inventory outstanding
If you have not already worked out your average inventory, use the average inventory calculator first, then multiply the result by the number of days in the period you are measuring.
Why is calculating days inventory outstanding important?
Spot slow-moving stock early
A rising DIO flags inventory that is sitting too long, so you can adjust purchasing or run a promotion before it ties up more cash.
Plan cash flow with more accuracy
Knowing how long stock takes to sell helps you forecast when cash tied up in inventory will convert back into revenue.
Benchmark performance against your industry
Comparing your DIO to industry averages shows whether your inventory turns over faster or slower than competitors, which is a signal of operational efficiency and demand alignment.
Frequently asked questions
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