Inventory Outstanding Days

Inventory outstanding days, often referred to as Days Inventory Outstanding (DIO), is a financial metric that measures the average number of days it takes for a company to sell its inventory. It is 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 suggests efficient inventory management and faster inventory turnover, while a higher DIO may indicate slower sales or excess inventory, potentially tying up capital and impacting profitability.