What is DIO?

[accountinglads]

Days Inventory Outstanding is the meaning of DIO. dio accounting calculates the average period it takes for a company to move its inventory. The ratio lets companies see how effective they are at converting their stock into sales. A quick movement of goods, as shown by a low DIO, is considered good for most retailers. High DIO may mean that a store has too many goods or not enough customers. Collecting cash on sales is important for the cash conversion cycle and is regularly used by accountants and analysts.

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