Definition · working capital
Days inventory outstanding (DIO)
Days inventory outstanding measures the average number of days inventory sits before being sold, usually calculated from inventory and cost of goods sold. For days inventory outstanding (DIO), the useful boundary is the cash source, timing horizon, owner, liquidity exposure, and decision before options narrow.
Also known as DIO, days inventory outstanding, days sales of inventory, DSI, days in inventory, inventory days
Why it matters
Understanding days inventory outstanding (DIO) matters because cash decisions are time-sensitive. Teams need to know when money moves, which balance changes, who owns the next action, and what can still be changed before liquidity tightens. Pluvo computes DIO from inventory and COGS data and links changes to the purchasing and sales drivers behind them.
In practice
Liquidity example
Finance teams use days inventory outstanding (DIO) when they need to understand cash timing before a decision is made. A team might compare expected receipts, payroll, vendor payments, and debt obligations to decide what action is needed this week.
Pluvo example
Pluvo computes DIO from inventory and COGS data and links changes to the purchasing and sales drivers behind them.
In practice, teams should define days inventory outstanding (DIO) with a clear source, owner, time period, and decision before they use it in reporting, planning, or operating reviews.
Understanding days inventory outstanding (DIO) matters because cash decisions are time-sensitive. Teams need to know when money moves, which balance changes, who owns the next action, and what can still be changed before liquidity tightens. Pluvo computes DIO from inventory and COGS data and links changes to the purchasing and sales drivers behind them.
A strong workflow for days inventory outstanding (DIO) separates the definition from the action: first agree what the term means, then decide how it is measured, when it changes, and who is accountable for the next step.
Pluvo computes DIO from inventory and COGS data and links changes to the purchasing and sales drivers behind them.
FAQ
What is days inventory outstanding (DIO)?
Days inventory outstanding measures the average number of days inventory sits before being sold, usually calculated from inventory and cost of goods sold. For days inventory outstanding (DIO), the useful boundary is the cash source, timing horizon, owner, liquidity exposure, and decision before options narrow.
How do you calculate DIO?
To calculate days inventory outstanding (DIO), define the source data, time period, comparison basis, and owner before applying the formula. The useful answer is not only the math; it is whether the inputs and timing match the decision the metric supports.