Definition The average number of days stock is held before it is sold.
Also called DIO, Days inventory outstanding
Example €100k of average inventory with €600k of COGS × 365 gives about 61 days.
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Why it matters Holding stock too long ties up cash.
Where it is used Supply chain and working capital reports.
How to calculate it Average inventory ÷ COGS × 365
Worked example €100k of average inventory with €600k of COGS × 365 gives about 61 days.
