Days Inventory Outstanding (DIO) Calculator
Days Inventory outstanding (DIO) is the average number days that a company needs to sell all its inventory. Calculate Days Inventory Outstanding (DIO) using our easy to use simple Days Inventory Outstanding Formula & Calculator.
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Days Inventory Outstanding (DIO) Calculator Details
Learn what is days inventory outstanding and how to calculate days inventory outstanding? DIO is key metrics to determine how easily company can sell its products and to analyze company’s inventory efficiency.
What is Days Inventory Outstanding (DIO)?
Days Inventory outstanding (DIO) is the average number days that a company needs to sell all its inventory. In simple words DIO measures how quickly a company can turn its inventory into sales.
Days Inventory Outstanding Formula
Days Inventory Outstanding (DIO) = (Average inventory / Cost of sales) x Number of days in period
Average inventory = (Beginning inventory + Ending inventory)
A low days inventory outstanding means that a company can more quickly turn its inventory into sales.
A high days inventory outstanding means that company not able to convert its inventory into sales quickly.
How to calculate days inventory outstanding?
Days inventory outstanding (DIO) can be easily calculated by following the below steps
1. Calculate Average Inventory
Average inventory is the sum of beginning inventory and ending inventory divided by 2.
Average inventory = (Beginning inventory + Ending inventory)
2. Find out cost of goods sold and company’s accounting period
Company accounting period is typically a fiscal year which is 365 days
3. Calculate DIO using DIO formula
Days Inventory Outstanding (DIO) = (Average inventory / Cost of sales) x Number of days in period