American Airlines Group (AAL)

Days of inventory on hand (DOH)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover		13.59	13.93	14.01	14.17	14.57	14.17	15.33	15.52	15.32	15.16	13.69	14.03	14.43	12.37	11.86	11.41	12.77	9.95	11.14	12.14
DOH	days	26.86	26.20	26.05	25.76	25.05	25.76	23.81	23.52	23.83	24.08	26.66	26.01	25.30	29.51	30.78	32.00	28.58	36.67	32.78	30.07

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 13.59
= 26.86

Days of Inventory on Hand (DOH) is a financial metric that measures how efficiently a company manages its inventory by indicating the number of days it takes to sell its average inventory. For American Airlines Group, the DOH has fluctuated over the past few years, ranging from a high of 36.67 days in September 2020 to a low of 23.52 days in March 2023.

A decreasing trend in DOH, such as the decline from 36.67 days in September 2020 to 23.52 days in March 2023, indicates that American Airlines Group has been more efficient in managing its inventory turnover. This could suggest improved inventory management practices, better demand forecasting, or quicker inventory turnover, which can positively impact the company's cash flow and profitability.

On the other hand, an increasing trend in DOH, as observed in some periods where the DOH increased slightly, may signal potential challenges in inventory management, such as overstocking or slower inventory turnover. This can lead to increased holding costs, obsolescence risk, and reduced profitability.

Overall, it is important for American Airlines Group to monitor its DOH closely and strive to strike a balance between managing inventory levels to meet customer demand while minimizing excess inventory holding costs. Regularly evaluating and improving inventory management practices can help enhance operational efficiency and financial performance in the long run.