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Days Inventory Outstanding / DIO Formula

Days inventory outstanding (DIO) is a financial metric that measures the average number of days it takes for a company to turn its inventory into sales.

DIO = (Average Inventory / Cost of Goods Sold) x Number of Days in the Period

Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Cost of Goods Sold = Total cost of producing and selling goods during the period
Number of Days in the Period = The number of days in the reporting period (e.g. quarter or year)

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