---
title: "Definition of DIO"
url: https://signalscreener.fr/definition/days-inventory/
markdown_url: https://signalscreener.fr/definition/days-inventory.md
description: "The average number of days a company holds inventory before selling it."
type: glossary-definition
site: Signal Screener
language: en
keywords:
  - "DIO"
  - "Days Inventory Outstanding"
translations:
  de: https://signalscreener.fr/de/definition/days-inventory.md
  es: https://signalscreener.fr/es/definition/days-inventory.md
  fr: https://signalscreener.fr/fr/definition/days-inventory.md
---

# Days Inventory Outstanding

## What is DIO?

The average number of days a company holds inventory before selling it.

## Think of it like this

Like measuring how long groceries sit on your shelf before you eat them - fresher is usually better.

## Formula

```
DIO = (Inventory ÷ COGS) × 365
```

- **Inventory**: Average inventory value
- **COGS**: Cost of Goods Sold
- **365**: Days in a year

## Why it matters

- Shows inventory holding period
- Lower = less cash tied up in inventory
- High DIO may indicate obsolescence risk
- Critical for perishable goods businesses

## What's a good value?

| Range | Rating | What it means |
|---|---|---|
| < 30 days | Excellent | Fast-moving inventory (groceries) |
| 30-60 days | Good | Efficient inventory management |
| 60-90 days | Average | Normal for many industries |
| > 90 days | High | Slow-moving inventory, tied-up capital |

## Real-world example

Electronics retailers aim for low DIO because products become obsolete quickly.

---

This is educational content, not financial advice.

Source: [Definition of DIO](https://signalscreener.fr/definition/days-inventory/) on Signal Screener. Free to quote and cite with attribution and a link to that URL, which is the canonical one.

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