Days inventory outstanding (DIO)
How many days on average stock sits before it is sold.
Rising inventory days usually mean products are not moving, which precedes discounting.
How it is computed here
Inventory x 365 / cost of revenue
Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it. Filed under risk. Lower is the stronger reading, other things equal.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Meaningless for companies that hold no inventory.
- A year-end snapshot; seasonal businesses are badly served.
Not meaningful for banks, insurers, REITs: the product prints n/m with the reason rather than a number for them.
Questions
How is days inventory outstanding calculated?
Inventory x 365 / cost of revenue. Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it.
What does days inventory outstanding tell a value investor?
Rising inventory days usually mean products are not moving, which precedes discounting.
When does days inventory outstanding mislead?
Meaningless for companies that hold no inventory. A year-end snapshot; seasonal businesses are badly served.