![]() ![]() The second stage focuses on the current sales and represents the duration of the time. A higher DIO indicates a lesser turnover, so DIO should be less.ĭays sales outstanding are calculated based on the cost of goods sold (COGS), which represents the cost of goods or acquiring or manufacturing the product the company sells during the year. A less value of DIO is preferred as it indicates that the company is making sales in a higher amount. This amount is calculated using the day’s inventory outstanding (DIO). The first thing on the available inventory level represents how long it will take for the business to sell its inventory to the final customer.
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