Days inventory outstanding tells you how long stock sits before it sells — and how much cash it ties up. Enter your inventory and cost of sales to see your DIO and turnover instantly.
DIO, turnover, and the cash tied up in your stock.
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Days inventory outstanding (DIO) is the average number of days your inventory sits before it's sold. It's calculated as average inventory divided by daily cost of goods sold (annual COGS divided by 365). A lower DIO means stock sells faster and less cash is tied up in it; a rising DIO can signal overstocking or slowing sales. It's one of the three parts of the cash conversion cycle.
It depends heavily on the industry — grocers and fast-fashion turn stock many times a year, while furniture or jewellery turn it slowly. Turnover is annual COGS divided by average inventory (and DIO is roughly 365 divided by turnover). Rather than a universal number, aim to turn stock faster than before and in line with your sector, because faster turnover frees cash and reduces the risk of stock going stale or obsolete.
A ready-to-use spreadsheet (Excel & Google Sheets): DIO and inventory turnover, cash tied up in stock, and tracking by line or over time — delivered instantly after checkout. AI-assisted, human-built; not financial advice.
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