Days inventory outstanding: Converting Inventory Holdings into Days
Days inventory outstanding expresses average stock relative to the cost flowing through sales. It translates turnover into a time measure that is easier to discuss operationally.
Use the Days inventory outstanding Calculator to enter your own figures and compare the result with the worked example below.
Days inventory outstanding formula
DIO = Average inventory ÷ COGS × Days
Worked example
| Item | Example value |
|---|---|
| Average inventory | 20000 USD |
| Cost of goods sold | 100000 USD |
| Days in period | 365 days |
| Days inventory outstanding | 73 |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
Match the period's days with the COGS figure. Different product categories can have very different normal holding periods.
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Method and further reading
The example follows the FinMathly calculator method. For broader background, see SEC: Understanding financial statements. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
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