Days Inventory Outstanding

The Days Inventory Outstanding widget provides a comprehensive view on the working capital management ratio. This banner widget is displayed on the Finance Manager page.

The Days Inventory Outstanding (DIO) is also referred as inventory days of supply, days in inventory, or the inventory period.

Days Inventory Outstanding is calculated to find the average number of days a company needs to convert the inventory into saleable product (sales). This determines the efficiency of sales.

A low DIO indicates a less risk of obsolete inventory as the inventory is converted into cash within a short duration.

Days Inventory Outstanding Calculation

Days Inventory Outstanding = (Average inventory / Cost of sales) x Number of days in period

Average inventory = (Beginning inventory + Ending inventory) / 2
Note: The Days in Period is also referred as the number of days in the period, such as accounting period, quality check period. The period can be a week, a quarter, or annually.

For example

A company has $27,000 as inventory ((Average Inventory) on an average during a year (period) and the cost of goods sold is $243,000 (cost of sales). The calculation of DIO:

DIO = (27,000/243,000) x 365 = 40.56 days

The widget retrieves information from the Taxonomies (tfgld1170m000) and tfgld1670m000 session in Infor LN to calculate the accounts receivable ratio. The Taxonomies (tfgld1670m000) session in Infor LN is used to map the accounts for this widget. The widget displays a graphical representation based on the calculated value for the selected period.
Note: 
  • You can select the Include Non-Finalized Transaction check box on the Configure Widget screen in the Selection widget to include the amounts that are not finalized.
  • The GAAP (Generally Accepted Accounting Principles) or IFRS (International Financial Reporting Standards) accounting rules are applied.
On the widget, you can:
  • View the Company name.
  • Click on the Company name to view the details of the widget configuration.
  • Click Dropdown to modify the period. A line graph displays a monthly DIO for the fiscal year if YTD option is selected. A bar chart displays the DIO for the selected month and previous month if the MTD option is selected.
  • Rest the pointer on the graph to view the exact value.