Inventory Days on Hand – Formula & Calculator
What is Inventory Days on Hand (DOH)
“Inventory Days on Hand is a calculation of how many days inventory will last given the current rate of sales.” (Key Accounting Principles Volume 1 by Neville Joffe)
DOH Formula 1
Inventory Days on Hand = Average Inventory / Cost of Goods Sold x 365
DOH is the average number of days a product sits in inventory.
It is one of the key inventory velocity measurements, and as such shows how fast inventory moves through a supply chain. The lower the DOH, the faster the inventory velocity. This is a good thing because a high inventory velocity suggests supply chain efficiency.
DOH Synonyms
There are two commonly used synonyms for Inventory Days on Hand:
- Days of Inventory On-Hand (DOI)
- Inventory Days
Inventory Days on Hand Formulas
Let’s break down the DOH formula. The most concise formula is as follows:
DOH Formula 2
Inventory Days on Hand = 365 / Inventory Turnover Ratio
- 365 – The number of days in a year.
- Inventory Turnover Ratio – The number of times the inventory cycles through the supply chain in a year.
Inventory Turnover Ratio Definition
The Inventory Turnover Ratio is the most commonly used measure of inventory velocity, DOH being the second.
The definition of Inventory Turnover Ratio is:
“Inventory turnover measures the average number of times that the inventory is sold during the period.” (Weygandt, et all. Accounting Principles 1996 18.17)
This metric measures how quickly an organization can sell the inventory that it has on hand. The higher the inventory turnover, the lower the DOH, and the faster the organization is moving inventory.
To calculate DOH we need to first calculate the Inventory Turnover Ratio. Here is the formula.
Inventory Turnover Ratio Formula
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
Unfortunately, the fun doesn’t end here, because the Inventory Turnover Ratio itself consists of two formulas.
Inventory Turnover Ratio Components
1. Cost of Goods Sold (COGS) = the cost of creating or buying the goods a company sells during a given period.
COGS = (Beginning Inventory + Purchases) – Ending Inventory
2. Average Inventory = the average value of the inventory in a given period.
Average Inventory = (Beginning Inventory – Ending Inventory)/2
DOH Formula 3
Now that we’ve fully disassembled the DOH formula to its component parts, let’s see what we have.
DOH = [365 x (Beginning Inventory – Ending Inventory)] / [(Beginning Inventory + Purchases – Ending Inventory) * 2]
In the end, the inventory days on hand calculation comes down to … well inventory. It’s all about comparing the inventory you started with, to the inventory you ended with, and accounting for any cost associated with acquiring any new inventory in that period.
How to Calculate Inventory Days on Hand – Sample Calculation
Let’s do a sample DOH calculation for Aberdeen Electronics, a fictional computer manufacturer.
Aberdeen Electronics Sample Data
| Inventory – April 31, 2025 | $5,000,000 |
| Inventory – April 31, 2026 | $4,000,000 |
| Purchases | $500,000 |
Applying the Inventory Days Formula
Inventory Days on Hand = [365 x ($5,000,000 – $4,000,000)] / [( ($5,000,000 + $500,000 – $4,000,000) * 2] = 122 days
This means that Aberdeen Electronics moves it’s inventory every 122 days or roughly 3 times a year.
Inventory Days Excel Calculator Template – Free Download
Here is a free downloadable excel template with the three DOH formula calculators.
Download – Inventory Days on Hand Excel Calculator Template
Why is Inventory Days on Hand Important
Higher Velocity Through Supply Chain
As we discussed, DOH is important because it measures velocity through the supply chain. A high velocity is associated with good things like:
- Reduced warehousing costs
- Reduced risk of obsolete or perishable goods
- An increase in free working capital
Lower Inventory Days is Better
A low DOH is associated with a high inventory velocity because the fewer days the inventory sits in a warehouse, the more frequently it is turned over or moved. We want DOH to be as low as possible.
Inventory Days on Hand – Sector & Industry Benchmarks
The inventory turnover ratio is so important that it is usually submitted by many US companies as part of their SEC financial statement filings annually. Using this data, we are able to calculate the DOH.
Inventory Days on Hand – Sector Benchmarks
Here is a table showing the average DOH by sector. It was computed from the inventory turn ratio data supplied by CSI Market’s company efficiency data as of April 14, 2026.
| Sector Name | Sector DOH |
| Basic Materials | 76 |
| Capital Goods | 135 |
| Conglomerates | 203 |
| Consumer Discretionary | 54 |
| Consumer Non-Cyclical (Staples) | 38 |
| Energy | 62 |
| Financial | NA |
| Healthcare | 304 |
| Retail | 42 |
| Services | 29 |
| Technology | 47 |
| Transportation | 203 |
| Utilities | 913 |
Inventory Days on Hand – Industry Benchmarks
Here is a breakdown of DOH by industry, also obtained from CSI Market.
*Industries in the financial sector, do not track inventory in the same way as most others so you will not see a DOH metric.
| Industry Name | Industry DOH | Sector Name | Sector DOH | Example Company | Ticker | Company DOH |
| Chemical Manufacturing | 69 | Basic Materials | 76 | Dow | DOW | 72 |
| Specialty Chemicals | 79 | Basic Materials | 76 | DuPont | DD | 83 |
| Fertilizers & Agricultural Chemicals | 96 | Basic Materials | 76 | Nutrien | NTR | 99 |
| Metal Mining | 114 | Basic Materials | 76 | BHP | BHP | 118 |
| Gold Mining | 152 | Basic Materials | 76 | Newmont | NEM | 159 |
| Steel | 72 | Basic Materials | 76 | U.S. Steel | X | 69 |
| Paper & Packaging | 61 | Basic Materials | 76 | International Paper | IP | 63 |
| Forest Products | 87 | Basic Materials | 76 | Weyerhaeuser | WY | 91 |
| Agricultural Production | 94 | Basic Materials | 76 | Deere | DE | 96 |
| Construction & Mining Machinery | 136 | Capital Goods | 135 | Caterpillar | CAT | 150 |
| Construction & Engineering | 3650 | Capital Goods | 135 | Fluor | FLR | 7300 |
| Building Products | 73 | Capital Goods | 135 | Owens Corning | OC | 72 |
| Electrical Equipment | 89 | Capital Goods | 135 | Eaton | ETN | 86 |
| Industrial Automation | 114 | Capital Goods | 135 | Rockwell Automation | ROK | 120 |
| Metal Fabrication | 96 | Capital Goods | 135 | Parker-Hannifin | PH | 101 |
| Tools & Accessories | 81 | Capital Goods | 135 | Stanley Black & Decker | SWK | 83 |
| Construction Materials | 78 | Capital Goods | 135 | Vulcan Materials | VMC | 81 |
| Aerospace & Defense | 177 | Capital Goods / Industrials | 135 | Lockheed Martin | LMT | 20 |
| Diversified Conglomerates | 243 | Conglomerates | 203 | Berkshire Hathaway | BRK.B | 252 |
| Industrial Conglomerates | 152 | Conglomerates | 203 | General Electric | GE | 159 |
| Automotive Manufacturers | 152 | Consumer Discretionary | 54 | Tesla | TSLA | 41 |
| Auto Parts | 59 | Consumer Discretionary | 54 | Magna International | MGA | 61 |
| Homebuilding | 29 | Consumer Discretionary | 54 | D.R. Horton | DHI | 31 |
| Household Appliances | 49 | Consumer Discretionary | 54 | Whirlpool | WHR | 51 |
| Consumer Electronics | 54 | Consumer Discretionary | 54 | Sony | SONY | 56 |
| Leisure Products | 62 | Consumer Discretionary | 54 | Hasbro | HAS | 64 |
| Casinos & Gaming | 20 | Consumer Discretionary | 54 | Las Vegas Sands | LVS | 21 |
| Hotels & Lodging | 913 | Consumer Discretionary | 54 | Marriott | MAR | 1043 |
| Restaurants | 14 | Consumer Discretionary | 54 | McDonald’s | MCD | 14 |
| Apparel & Accessories | 76 | Consumer Discretionary | 54 | Nike | NKE | 79 |
| Tire Manufacturing | 65 | Consumer Discretionary | 54 | Goodyear | GT | 68 |
| Food Processing | 36 | Consumer Non-Cyclical (Staples) | 38 | Nestlé | NSRGY | 37 |
| Beverages (Alcoholic) | 107 | Consumer Non-Cyclical (Staples) | 38 | Anheuser-Busch | BUD | 114 |
| Beverages (Non-Alcoholic) | 89 | Consumer Non-Cyclical (Staples) | 38 | Coca-Cola | KO | 91 |
| Tobacco | 192 | Consumer Non-Cyclical (Staples) | 38 | Philip Morris | PM | 203 |
| Household Products | 53 | Consumer Non-Cyclical (Staples) | 38 | Procter & Gamble | PG | 54 |
| Personal Care | 63 | Consumer Non-Cyclical (Staples) | 38 | Colgate-Palmolive | CL | 65 |
| Packaged Foods | 43 | Consumer Non-Cyclical (Staples) | 38 | Kraft Heinz | KHC | 45 |
| Oil & Gas Integrated | 59 | Energy | 62 | ExxonMobil | XOM | 57 |
| Oil & Gas Exploration & Production | 608 | Energy | 62 | ConocoPhillips | COP | 664 |
| Oil & Gas Equipment & Services | 118 | Energy | 62 | Schlumberger | SLB | 122 |
| Oil Refining & Marketing | 20 | Energy | 62 | Valero | VLO | 19 |
| Coal Mining | 37 | Energy | 62 | Peabody Energy | BTU | 38 |
| Renewable Energy | 261 | Energy | 62 | NextEra Energy | NEE | 281 |
| Pipelines & Midstream | 1825 | Energy | 62 | Kinder Morgan | KMI | 2433 |
| Commercial Banks | NA | Financial | NA | JPMorgan Chase | JPM | NA |
| Regional Banks | NA | Financial | NA | PNC Financial | PNC | NA |
| Investment Banks | NA | Financial | NA | Goldman Sachs | GS | NA |
| Asset Management | NA | Financial | NA | BlackRock | BLK | NA |
| Insurance (Life) | NA | Financial | NA | MetLife | MET | NA |
| Insurance (Property & Casualty) | NA | Financial | NA | Allstate | ALL | NA |
| Consumer Finance | NA | Financial | NA | Capital One | COF | NA |
| Mortgage Finance | NA | Financial | NA | Rocket Companies | RKT | NA |
| Financial Data & Exchanges | NA | Financial | NA | S&P Global | SPGI | NA |
| Real Estate Investment Trusts (REITs) | NA | Financial | NA | Simon Property Group | SPG | NA |
| Real Estate Operations | NA | Financial | NA | CBRE | CBRE | NA |
| Biotechnology | 730 | Healthcare | 304 | Amgen | AMGN | 811 |
| Pharmaceuticals | 203 | Healthcare | 304 | Pfizer | PFE | 215 |
| Medical Equipment & Supplies | 126 | Healthcare | 304 | Medtronic | MDT | 130 |
| Healthcare Facilities | 1217 | Healthcare | 304 | HCA Healthcare | HCA | 1460 |
| Healthcare Plans | 3650 | Healthcare | 304 | UnitedHealth Group | UNH | 4563 |
| Life Sciences Tools | 140 | Healthcare | 304 | Thermo Fisher Scientific | TMO | 146 |
| General Merchandise Stores | 37 | Retail | 42 | Walmart | WMT | 36 |
| Discount Stores | 33 | Retail | 42 | Dollar General | DG | 32 |
| Specialty Retail | 74 | Retail | 42 | Home Depot | HD | 72 |
| Apparel Retail | 99 | Retail | 42 | Lululemon | LULU | 101 |
| E-commerce & Online Retail | 39 | Retail | 42 | Amazon | AMZN | 37 |
| Automotive Retail | 27 | Retail | 42 | AutoNation | AN | 28 |
| Grocery Stores | 25 | Retail | 42 | Kroger | KR | 24 |
| Food Retail | 26 | Retail | 42 | Costco | COST | 26 |
| Drug Retail | 35 | Retail | 42 | CVS Health | CVS | 36 |
| Advertising | 1825 | Services | 29 | Omnicom | OMC | 2028 |
| Business Services | 1217 | Services | 29 | ADP | ADP | 1460 |
| Business Services | 2433 | Services | 29 | Robert Half | RHI | 3042 |
| Legal Services | 7300 | Services | 29 | LegalZoom | LZ | 9125 |
| Education & Training | 3650 | Services | 29 | Pearson | PSO | 4563 |
| Consulting Services | 3042 | Services | 29 | Booz Allen Hamilton | BAH | 3650 |
| Broadcasting & Media | 913 | Services | 29 | Disney | DIS | 1043 |
| Publishing | 1217 | Services | 29 | News Corp | NWSA | 1304 |
| Software & Programming | 4 | Technology | 47 | Microsoft | MSFT | 4 |
| Semiconductors | 103 | Technology | 47 | NVIDIA | NVDA | 99 |
| Computer Hardware | 35 | Technology | 47 | Apple | AAPL | 9 |
| Computer Networks | 81 | Technology | 47 | Cisco | CSCO | 58 |
| IT Infrastructure | 94 | Technology | 47 | Keysight Technologies | KEYS | 175 |
| Internet Services & Social Media | 0 | Technology | 47 | Meta | META | NA |
| Wireless Telecom | 1825 | Technology | 47 | Verizon | VZ | 2028 |
| Wireline Telecom | 1460 | Technology | 47 | AT&T | T | 1659 |
| Internet Advertising | NA | Technology | 47 | Alphabet | GOOGL | NA |
| Airlines | 730 | Transportation | 203 | Delta Air Lines | DAL | 811 |
| Railroads | 521 | Transportation | 203 | Union Pacific | UNP | 562 |
| Trucking | 332 | Transportation | 203 | J.B. Hunt | JBHT | 348 |
| Marine Shipping | 281 | Transportation | 203 | Maersk | AMKBY | 292 |
| Logistics & Freight | 166 | Transportation | 203 | FedEx | FDX | 174 |
| Electric Utilities | 1460 | Utilities | 913 | Duke Energy | DUK | 1659 |
| Gas Utilities | 1217 | Utilities | 913 | Atmos Energy | ATO | 1304 |
| Water Utilities | 1825 | Utilities | 913 | American Water Works | AWK | 2028 |
| Multi-Utilities | 1043 | Utilities | 913 | Exelon | EXC | 1141 |
Inventory Days on Hand vs. Cash to Cash Cycle (C2C)
C2C / Cash Conversion Cycle (CCC) Definition
Cash to Cash Cycle (C2C), also known commonly as Cash Conversion Cycle (CCC) is another measure of velocity. It measures how long it takes a company to convert each dollar tied up in the production and sales process to cash as the final goods are sold.
According to Kieso, Weygandt, and Warfield (2013), the definition of the Cash to Cash Cycle “is the period of time elapsing between the acquisition of goods and services…and the final cash realization resulting from sales and subsequent collection.”
C2C Formula
C2C = Days of Inventory (DOI) + Days of Sales Outstanding (DSO) – Days of Payable Outstanding (DPO)
C2C is a complex formula, because each of its component parts also have their own subcomponents.
The key takeaway is that the lower the C2C, the less time capital is tied up in the supply chain and the higher the inventory velocity.
DOH vs C2C
Inventory Days on Hand and C2C are both important measures of inventory velocity. But there is one important difference.
DOH, as you can see in the extended formula:
DOH = [365 x (Beginning Inventory – Ending Inventory)] / [(Beginning Inventory + Purchases – Ending Inventory) * 2]
deals only with inventory value and inventory purchases.
The Cash to Cash Cycle formula factors inventory into the calculation too but also considers the impact of how the organization handles payments and receivable terms.
DOH is inventory-in, inventory-out.
C2C is cash-in, cash-out.