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Days Inventory Outstanding Calculator

Calculate DIO — the average number of days inventory sits before it sells — from average inventory and cost of goods sold.

Average inventory

Cost of goods sold (period)

Period length

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How it works

DIO = average inventory ÷ cost of goods sold × days in period · Inventory turnover = cost of goods sold ÷ average inventory

Days inventory outstanding tells you how many days, on average, inventory sits on the shelf before being sold. A lower DIO means faster-moving stock and less cash tied up in the warehouse, while a high DIO can flag slow sellers, overstocking or obsolescence risk. It is the inverse view of inventory turnover — fewer days equals more turns per year.

Worked example

With $300,000 of average inventory and $2,000,000 in annual cost of goods sold, DIO is 300,000 ÷ 2,000,000 × 365 ≈ 54.8 days, which corresponds to about 6.7 inventory turns a year.

Frequently asked questions

What is a good days inventory outstanding?

Lower is generally better, but the right level depends on the business. Grocery and fast fashion aim for very low DIO; heavy machinery or luxury goods naturally hold stock much longer. Compare against your own trend and close competitors.

How does DIO relate to inventory turnover?

They are two views of the same thing: turnover = cost of goods ÷ inventory, and DIO = 365 ÷ turnover. A DIO of about 55 days equals roughly 6.7 turns per year.

Should I use average or ending inventory?

Average inventory — the average of the beginning and ending balances — smooths out seasonal swings and is more accurate. Ending inventory is a quick approximation when you only have a single snapshot.

Related calculators

Days Payable Outstanding Calculator

Calculate DPO — the average number of days your business takes to pay its suppliers, from accounts payable and cost of goods.

Cash Conversion Cycle Calculator

Combine days inventory, days sales and days payable outstanding into the cash conversion cycle — how long cash is tied up.

Inventory Turnover Calculator

Calculate inventory turnover from COGS and average inventory, plus days inventory outstanding — how many days of stock you hold.

Inventory Turnover Calculator

Calculate inventory turnover from COGS and average inventory, plus the days-sales-of-inventory that shows how long stock sits on the shelf.

Educational estimate, not financial, tax or investment advice.