Days Inventory On Hand Calculation (DIOH) is a metric used to measure the average amount of time your inventory takes to sell. Knowing this number allows you to better understand the flow and health of your business. To calculate DIOH, simply take the value of your beginning inventory, add in any new purchases made during the time period, and subtract out all sales from that figure. This will give you the total amount of inventory at hand. Divide this number by the cost of goods sold for that same period and you have your DIOH! Knowing your DIOH can help you determine if there are areas where you’re overstocking or understocking, so it’s an important tool for staying ahead in the game of business.