Financial Metrics

Days Inventory Outstanding (DIO)

2026-05-31 7 min read

Days Inventory Outstanding (DIO) measures the average days inventory sits in stock before being sold. Formula: (Average Inventory / COGS) × Days in Period. DIO is the inventory-side counterpart to DSO. Lower DIO = better cash efficiency; higher DIO = capital tied up in unsold goods. Best-in-class DTC: 60–90 days. Apparel: typically 90–120. Above 180 days indicates overordering or merchandising problems.

TL;DR

<strong>Days Inventory Outstanding (DIO)</strong> measures the average days inventory sits in stock before being sold. Formula: (Average Inventory / COGS) × Days in Period. DIO is the inventory-side counterpart to DSO. Lower DIO = better cash efficiency; higher DIO = capital tied up in unsold goods. Best-in-class DTC: 60–90 days. Apparel: typically 90–120. Above 180 days indicates overordering or merchandising problems.

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Sources

Definitions and benchmarks reference primary sources from the Financial Planning pillar. Verified at publication.

  1. 1 AFP Treasury Benchmarks 2025 — Association for Financial Professionals, 2025. View source .
  2. 2 Bessemer Burn Multiple Study — Bessemer Venture Partners, 2024. View source .
  3. 3 OpenView SaaS Benchmarks — OpenView Partners, 2025. View source .

Fairview cites primary sources only — government data, academic research, industry benchmarks from named publishers, and official vendor documentation. See our editorial standards.