What are Days Inventory on Hand, and what is indicated when days on hand grows?

"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."

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.