Days inventory outstanding (DIO) calculator
DIO is used in cash conversion cycle analysis and tells you how many days your money stays locked in stock.
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How to use it
- Enter average inventory value, cost of goods sold for the period and days in period.
- The result appears straight away and updates as you edit.
- Copy the result, or copy a link that keeps the same values to share it.
How it is calculated
DIO = (average inventory ÷ cost of goods sold) × days in period.
Example
Inputs: Average inventory value = 100,000, Cost of goods sold for the period = 600,000, Days in period = 365 days. Result: Days inventory outstanding: 60.8 days; Matching turnover ratio: 6 times.
Limits and caveats
- Take inventory and COGS from the same period; mixing a year with a quarter gives a wrong figure.
- Some analysts use closing inventory instead of the average, which shifts the result a little.
Questions about this tool
How is DIO different from turnover?
They are two views of the same figure: DIO equals days in the period divided by the turnover ratio.
Is a lower DIO always better?
Usually, because it frees cash, but going too low can cause stockouts and lost sales.
How many days should I use for a year?
365 is common and some companies use 360. Stick to one when you compare periods.