Days inventory outstanding (DIO) is a ratio that measures how long it takes a company to sell its inventory. It helps to evaluate how efficiently a company is managing its inventory and its cost of goods sold. The formula for days inventory outstanding is:
Days inventory outstanding = 1 / Inventory turnover x Number of days
Where:
- Inventory turnover is R0061,
invent_turn
Number of days is the period of time used to measure DIO, such as monthly, quarterly, or annually