Bookkeeper Mock Interview
Practice 30 Bookkeeper interview questions covering reconciliation, accuracy, and accounting software proficiency.
Question 19 of 30
What are Days Inventory on Hand, and what is indicated when days on hand grows?
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Brian Schuchart is a CPA and Senior Finance Business Partner. His professional experience includes senior management roles with NBC Sports, Virtual Health, and the Children's Hospital of Philadephia.
This is a question that gauges whether you understand metrics and can use them to catch trends in the business. Days Inventory on Hand is a metric that measures the health of the inventory asset. A high or growing metric indicates that there are problems selling through inventory.
Brian Schuchart is a CPA and Senior Finance Business Partner. His professional experience includes senior management roles with NBC Sports, Virtual Health, and the Children's Hospital of Philadephia.
"Days Inventory on Hand is an important metric that measures the health of Inventory. The metric indicates how many days of cost of goods sold are hung up in inventory at any given time. A low number of days indicates that the company is efficiently selling through inventory. A growing number of days indicates that there may be some issues with sell-through, which could lead to obsolescence issues in the future. Given this, sales strategy should be adjusted if Inventory DOH is growing."
I am a CPA with over 12 years of bookkeeping experience.
Days Inventory on Hand is how many days of cost of goods sold are hung up in inventory at any given time. A low number of days indicates that the company is efficiently selling through inventory. A growing number of days indicates that there may be some issues with selling. If DOH is growing, then the method of sales should be evaluated for changes.
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