# DIO Calculator – Days Inventory Outstanding

URL: https://speedycalculator.com/calculators/finance/dio/
Last updated: 2026-10-25

> The DIO calculator works out days inventory outstanding – the average number of days a company holds inventory before selling it – from average inventory and cost of goods sold, and the inventory turnover.

## Inputs

- Beginning inventory
- Ending inventory
- Cost of goods sold
- Days in the period

## Results

- Days inventory outstanding
- Inventory turnover

## Formula

```
DIO = average inventory ÷ COGS × days in the period
Inventory turnover = COGS ÷ average inventory
```

## Explanation

Lower DIO means inventory sells faster, freeing up cash and reducing the risk of obsolescence. Grocers turn stock in days; heavy machinery makers may take months.

### How to use the DIO Calculator – Days Inventory Outstanding

- **Beginning inventory**
- **Ending inventory**
- **Cost of goods sold**
- **Days in the period**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter beginning and ending inventory, cost of goods sold and the number of days in the period.

### Tips

- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.

### Common mistakes to avoid

- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.

### Inputs explained

FieldWhat to enterBeginning inventoryAmount in your currencyEnding inventoryAmount in your currencyCost of goods soldAmount in your currencyDays in the periodA number

### What each result means

- **Days inventory outstanding** = ([Beginning inventory] + [Ending inventory])÷2÷[Cost of goods sold]×[Days in the period]
- **Inventory turnover** = [Cost of goods sold]÷(([Beginning inventory] + [Ending inventory])÷2)

### Example values

How the main result changes when **Beginning inventory** changes and everything else stays at the example values above:

Beginning inventoryDays inventory outstanding (days)100,00047.7150,00054.8200,00061.8250,00068.8300,00075.8400,00089.8

## Worked example

Inputs — Beginning inventory: $200,000; Ending inventory: $240,000; Cost of goods sold: $1,300,000; Days in the period: 365.

Results — **Days inventory outstanding = 61.8 days**; Inventory turnover = 5.91.

## FAQ

**What is a good DIO?**
It depends on the industry – compare with competitors.

**How is DIO related to inventory turnover?**
DIO = days ÷ inventory turnover.

**Why does DIO matter?**
Inventory ties up cash and can become obsolete.

**What formula does the DIO Calculator – Days Inventory Outstanding use?**
DIO = average inventory ÷ COGS × days in the period.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)