Average Inventory Days Outstanding (AIDO) is a metric used to calculate the average number of days that a business holds its inventory. It is calculated by dividing the average inventory value over a given period of time by the total cost of goods sold during the same period. This metric is an important indicator of a business’s efficiency, as it demonstrates how quickly inventories are being managed, allowing companies to determine whether their inventory levels are too high or too low. AIDO also helps businesses identify issues related to cash flow and working capital management. By monitoring these metrics closely and taking necessary steps to improve them, businesses can ensure better asset utilization and maximize profits.