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
| Field | What to enter |
|---|---|
| Beginning inventory | Amount in your currency |
| Ending inventory | Amount in your currency |
| Cost of goods sold | Amount in your currency |
| Days in the period | A 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 inventory | Days inventory outstanding (days) |
|---|---|
| 100,000 | 47.7 |
| 150,000 | 54.8 |
| 200,000 | 61.8 |
| 250,000 | 68.8 |
| 300,000 | 75.8 |
| 400,000 | 89.8 |
Formula
DIO = average inventory ÷ COGS × days in the periodInventory turnover = COGS ÷ average inventoryWorked 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.
Frequently asked questions
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.