Analog Devices Inc (ADI)

Days of inventory on hand (DOH)

		Oct 28, 2023	Oct 29, 2022	Oct 30, 2021	Oct 31, 2020	Nov 2, 2019
Inventory turnover		4.79	5.74	3.86	5.26	5.40
DOH	days	76.23	63.58	94.52	69.34	67.63

October 28, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.79
= 76.23

To analyze Analog Devices Inc.'s days of inventory on hand (DOH) over the past five years, we can see that there has been fluctuation in this ratio.

The DOH measures how many days it takes for a company to turn its inventory into sales. A lower value is generally preferred, as it indicates that the company is efficiently managing its inventory.

In 2023, the DOH increased to 135.36 days from 114.02 days in 2022. This suggests that the company may have experienced challenges in managing its inventory during that period, possibly leading to higher holding costs and a potentially lower inventory turnover ratio.

In 2021, the DOH was relatively high at 156.89 days, indicating that the company took longer to convert its inventory into sales compared to the previous year. This could be a concern if not managed effectively.

In 2020, the DOH decreased to 116.08 days from 156.89 days in 2021, which indicates an improvement in inventory management efficiency. A decrease in the DOH implies that the company was able to sell its inventory faster, reducing holding costs and potentially improving cash flow.

Similarly, in 2019, the DOH was 112.58 days, showing consistent inventory turnover compared to the previous year.

Overall, fluctuations in the DOH over the past five years indicate changes in the efficiency of Analog Devices Inc.'s inventory management. It would be important to further investigate the reasons behind these variations to assess the effectiveness of the company's inventory control and to identify potential areas for improvement.