DIO Calculator (Days Inventory Outstanding)
Divide average inventory by cost of goods sold and scale to a year to find days inventory outstanding, the time stock sits before selling.
- Free
- No sign-up
Enter inventory and cost of goods sold to see days inventory outstanding.
Worked example
With these example inputs:
- Average inventory$80,000
- Cost of goods sold$500,000
Days inventory outstanding: 58.40
- Turns per year6.25
- If the first figure were 10% higher64.24
Frequently asked questions
How is DIO calculated?
Divide average inventory by cost of goods sold, then multiply by 365. $80,000 of inventory on $500,000 of COGS is about 58 days.
Is a lower DIO always better?
Usually, since stock turns into sales faster and ties up less cash. But too low can risk stockouts, so balance speed against availability.
What is days inventory outstanding in simple terms?
It is the average number of days your stock sits before it sells. The tool divides average inventory by the cost of goods sold. It then scales that to a full year by multiplying by 365. A lower number means your stock turns over faster.
Why does the tool use cost of goods sold, not sales?
Inventory on the books is valued at cost, not at its selling price. Matching it against cost of goods sold keeps both on the same basis. Using sales would mix cost and price and overstate the days. So the cost figure gives a fairer measure of how fast stock moves.
Is a lower DIO always better?
Usually a lower DIO means less cash is tied up in stock. But too low can mean you risk running out and losing sales. The right level depends on your industry and supply chain. Compare your DIO against your own past and similar firms.