Days Inventory Outstanding DIO
The average number of days a company holds inventory before it is sold.
What it is
Days inventory outstanding (DIO) measures how long, on average, a company's inventory sits on the shelf before it is sold. It is average inventory divided by cost of goods sold (COGS, the direct cost of the items sold), times the number of days in the period. DIO is the inventory-holding leg of the cash conversion cycle.
Why it matters
A lower DIO means leaner, faster-moving inventory and less cash tied up in unsold goods, which supports liquidity and reduces obsolescence risk. The pitfall: chasing the lowest possible DIO can backfire, since inventory cut too thin risks stockouts and lost sales, and the "right" level is highly industry-specific. A jeweller or aircraft maker will run far higher DIO than a grocer, so judge DIO against the company's own trend and direct peers, not an absolute target.
How it's calculated
Divide average inventory (beginning plus ending inventory, divided by two) by cost of goods sold, then multiply by the number of days in the period, commonly 365 for a full year. The result is expressed in days.
How Quintarthai uses it
Inventory and cost of goods sold needed to compute DIO are on the Financials tab of a company deep-analysis page, and the related cash-conversion-cycle entry sits in the Knowledge Base.