DIO calculator
- Formula
- (Inventory ÷ COGS for the period) × Days in the period
DIO = (Inventory ÷ COGS) × Days in the period90 for a quarter, 365 for a year.
Days inventory outstanding
45.0 days
How it’s worked out
- 1(Inventory ÷ COGS) × days($450,000 ÷ $900,000) × 9045.0 days
Runs in your browser; nothing you type is sent anywhere. Amounts in US dollars.
Worked on a real month of books
Northwind Traders, Inc., September 2026 (accrual basis, USD), the month the free course is taught on. Every figure is read off the course's posted ledger, not typed.
- 1(Inventory ÷ cost of revenue) × days($1,000 ÷ $17,000) × 301.8 days
See the statements these come from in the course.
How to read it
DIO says how long goods sit before they are sold. Every day of inventory is cash spent and not yet recovered.
Rising DIO with flat sales usually means over-buying or slow-moving stock — often the first sign of a write-down to come.
Common mistakes
- Valuing inventory at selling price rather than cost.
- Ignoring obsolete stock, which inflates DIO without being sellable.
Questions
- What does DIO mean?
- Days inventory outstanding: how many days of cost of goods sold are sitting in inventory.
- How does DIO relate to inventory turnover?
- It is inventory turnover expressed in days: days in the period divided by the number of turns.
Read it with
The metrics read alongside this one, and the terms it is confused with.
- Inventory turnover calculatorInventory turnover is a liquidity and working-capital metric, calculated as COGS ÷ Average inventory.Calculator
- Cash conversion cycle calculatorCCC is a liquidity and working-capital metric, calculated as DSO + DIO − DPO.Calculator
- DPO calculatorDPO is a liquidity and working-capital metric, calculated as (Ending AP ÷ COGS for the period) × Days in the period.Calculator
- DIODIO is a liquidity and working-capital metric, calculated as (Inventory ÷ COGS for the period) × Days in the period.Term
The formula is the one the glossary states, and the arithmetic is unit-tested. A ratio with nothing to divide by shows a dash — undefined is not zero. General information, not financial advice.