DIO
Days Inventory Outstanding
Short definition
DIO is how many days of COGS sit in inventory. It blends raw, WIP and finished goods into one average and does not separate surplus from stock-outs.
Detailed explanation
The denominator is COGS, not sales; otherwise margin distorts DIO. WIP inflates DIO in manufacturing; in trading DIO is closer to buy–sell speed. Pre-season builds swell period-average DIO.
A DIO rise ties cash and raises write-down risk. A DIO fall releases cash or is a stock-out; service level is tracked separately.
Why it matters for the CFO
Input hedges, lot size and the production plan size the cash need through DIO. Growth plus rising DIO is the inventory leg of overtrading.
How it is calculated
DIO = (Ortalama stok / COGS) × Dönem gün sayısı
Variables in the formula
- DIO: Days inventory outstanding
- Inventory: Average inventory
- COGS: Cost of goods sold
How to read it
Read DIO by SKU and warehouse; the average hides dead stock. There is no universal “good DIO”; lead time, season and waste set it. Inflation can lift the inventory amount and leave DIO flat.
Numerical example
Average inventory 70 mn TL, annual COGS 260 mn TL, 365 days → DIO = (70 / 260) × 365 ≈ 98 days.
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Definitions are educational. They are not investment, credit or tax advice.