Days Inventory Outstanding (DIO), also known as Inventory Days or Inventory Holding Period, is a financial metric that measures the average number of days it takes for a business to sell its inventory. The formula considers beginning inventory, ending inventory, and direct costs of goods sold. It is designed to assess how efficiently a business manages its inventory. The formula for calculating Days Inventory Outstanding is as follows: DIO = (Average Inventory / Cost of Goods Sold) * Number of Days in the Period