Applied Materials Inc (AMAT)

Days of inventory on hand (DOH)

		Oct 31, 2024	Oct 27, 2024	Oct 31, 2023	Oct 29, 2023	Oct 31, 2022
Inventory turnover		2.63	3.04	2.47	2.84	2.33
DOH	days	138.57	120.15	147.85	128.39	156.99

October 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.63
= 138.57

Applied Materials Inc's days of inventory on hand (DOH) has fluctuated over the past five years, as indicated by the data presented. In October 2022, the company held inventory for an average of 156.99 days before selling it. This metric decreased to 128.39 days by October 2023, suggesting more efficient management of inventory levels.

However, in the following year, the DOH increased to 147.85 days by October 2023, indicating a potential buildup of inventory that might require closer monitoring. Subsequently, the trend reversed as the DOH decreased to 120.15 days by October 2024, reflecting improved inventory turnover efficiency.

By the end of October 2024, the DOH increased slightly to 138.57 days, indicating that the company may need to strike a balance between inventory levels and sales to optimize its operations. The fluctuation in DOH highlights the importance of effectively managing inventory levels to ensure efficient operations and minimize holding costs.