Archer-Daniels-Midland Company (ADM)
Days of inventory on hand (DOH)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 6.89 | 7.23 | 6.38 | 5.47 | 5.11 | |
| DOH | days | 52.96 | 50.50 | 57.19 | 66.68 | 71.37 |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 6.89
= 52.96
Archer-Daniels-Midland Company's days of inventory on hand (DOH) has shown a decreasing trend over the years, from 71.37 days as of December 31, 2020, to 52.96 days as of December 31, 2024. This signifies that the company has been more efficient in managing its inventory levels and converting inventory into sales within a shorter timeframe.
A decreasing DOH indicates that the company is selling its products at a faster rate or managing its inventory more effectively, which can lead to lower storage costs and lower risk of obsolete inventory. It may also suggest improved demand forecasting and inventory management practices within the company.
However, it is important for management to strike a balance between maintaining optimal inventory levels to meet customer demand while avoiding stockouts. Monitoring DOH can help assess inventory management efficiency and effectiveness in optimizing working capital utilization.
Peer comparison
Dec 31, 2024