What is the difference between inventory turnover and days inventory outstanding?

They measure the same thing from two angles. Inventory turnover counts how many times you cycle through stock per period. Days inventory outstanding (DIO) is the average time it takes to sell that stock. The conversion is simple: Days Inventory = 365 ÷ Inventory Turnover Ratio. Each framing serves a different conversation. Finance teams tend to prefer DIO because it lines up with cash conversion cycles and working capital reporting, while operations teams often favor turnover because it speaks directly to rotation speed and replenishment cadence. Used together, the two views connect inventory performance to both Supply Chain execution and cash management.