Days Inventory Outstanding measures the average number of days a company holds inventory before selling it. Lower DIO means faster inventory movement. Rising DIO may indicate slowing demand, overstocking, or potential obsolescence.
DIO = 365 / Inventory Turnover (TTM)
Derived from inventory turnover, which uses TTM COGS divided by average inventory from SEC filings.
A: Grocery and perishable goods companies should have DIO under 30 days. General retail typically ranges from 45 to 90 days. Heavy manufacturing and aerospace can exceed 120 days due to long production cycles. Compare only within the same industry.
A: Rising DIO can mean the company is building inventory ahead of expected demand (positive), or that sales have slowed and inventory is accumulating (negative). Pair DIO trends with revenue growth to distinguish between the two.
A: DIO depends on how inventory and COGS are sourced. GeminIQ uses as-filed values from SEC filings.