Archer-Daniels-Midland Company (ADM)
Days of inventory on hand (DOH)
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 7.52 | 7.87 | 7.27 | 7.23 | 7.96 | 7.76 | 6.38 | 6.36 | 6.87 | 6.03 | 4.84 | 5.47 | 6.67 | 6.07 | 4.95 | 5.11 | 6.67 | 7.87 | 6.81 | 6.60 | |
| DOH | days | 48.51 | 46.39 | 50.18 | 50.50 | 45.85 | 47.04 | 57.22 | 57.36 | 53.13 | 60.50 | 75.43 | 66.68 | 54.76 | 60.10 | 73.68 | 71.37 | 54.73 | 46.39 | 53.58 | 55.31 |
September 30, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 7.52
= 48.51
Archer-Daniels-Midland Company's Days of Inventory on Hand (DOH) measures how many days it takes, on average, for the company to sell its inventory. A lower DOH figure indicates efficient inventory management, while a higher figure suggests potential inventory management challenges.
Analyzing the trend in DOH over several periods, we can see fluctuations in the efficiency of inventory management. For the most recent period ending September 30, 2024, the DOH was 48.51 days, which was slightly higher compared to the previous quarter. This increase may indicate a slower inventory turnover rate, which could tie up working capital and potentially lead to higher holding costs.
Comparing to the same period in the prior year, the DOH has shown improvements, as it stood at 45.85 days on September 30, 2023. This suggests that the company has been able to manage its inventory more efficiently over the past year.
However, there are fluctuations in the DOH over the analyzed periods, with some quarters showing significantly higher DOH figures, such as 75.43 days on June 30, 2022, and 71.37 days on March 31, 2021. These spikes in DOH could indicate inventory management challenges during those periods, potentially leading to excess or obsolete inventory.
In conclusion, understanding Archer-Daniels-Midland Company's DOH trend is crucial for evaluating the efficiency of inventory management and assessing potential impacts on working capital and profitability. The management should monitor and address any significant fluctuations in DOH to ensure optimal inventory management practices.
Peer comparison
Sep 30, 2024