AAR Corp (AIR)
Days of inventory on hand (DOH)
| May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 2.99 | 2.45 | 1.81 | 1.16 | 0.41 | 0.38 | 0.35 | 0.35 | 0.37 | 0.37 | 0.37 | 0.37 | 0.36 | 0.25 | 0.26 | 0.28 | 0.30 | 1.16 | 2.13 | 2.97 | |
| DOH | days | 121.94 | 149.00 | 201.90 | 314.51 | 900.50 | 962.99 | 1,035.15 | 1,029.73 | 977.30 | 975.28 | 988.64 | 996.45 | 1,027.17 | 1,457.42 | 1,382.04 | 1,297.03 | 1,216.21 | 314.99 | 171.49 | 123.04 |
May 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.99
= 121.94
The days of inventory on hand (DOH) for AAR Corp have varied significantly over the past few years, ranging from as low as 121.94 days to as high as 1,457.42 days. This ratio measures the number of days it takes for the company to sell its average inventory balance.
A higher DOH indicates that the company is holding onto inventory for a longer period, which could tie up capital and potentially lead to obsolescence or higher storage costs. The extremely high DOH values seen in some periods, such as 900.50 days and 962.99 days, may suggest inefficiencies in inventory management or challenges in selling products efficiently.
On the other hand, the lower DOH figures, like 121.94 days and 123.04 days, could imply better inventory turnover and smarter inventory management practices. It is important for the company to strike a balance in managing inventory levels to optimize working capital and operational efficiency.
Overall, AAR Corp should closely monitor its DOH trend over time and consider implementing strategies to improve inventory management, reduce excess inventory levels, and enhance inventory turnover to achieve better financial performance and operational agility.
Peer comparison
May 31, 2024