Applied Materials Inc (AMAT)

Days of inventory on hand (DOH)

		Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
Inventory turnover		2.84	2.64	3.23	2.81	2.37
DOH	days	128.39	138.17	112.91	129.79	154.22

October 29, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.84
= 128.39

Days of Inventory on Hand (DOH) is a measure used to evaluate how efficiently a company manages its inventory. It indicates the number of days it takes for a company to sell its average inventory. A lower DOH value is generally preferable as it suggests that the company is selling its inventory more quickly, which can lead to lower holding costs and better cash flow management.

Analyzing the DOH of Applied Materials Inc. over the past five years, the trend indicates some fluctuation in the efficiency of inventory management:

- In 2023, the DOH was 147.85 days, showing a decrease from the previous year.
- In 2022, the DOH was 156.99 days, which was higher compared to the previous year.
- In 2021, a lower DOH of 129.46 days was observed, reflecting more efficient inventory management.
- In 2020, the DOH increased to 149.84 days from the previous year, indicating a slower turnover of inventory.
- In 2019, the DOH was 154.22 days, which was higher than the preceding year.

This analysis suggests that there have been fluctuations in the efficiency of inventory management at Applied Materials Inc. over the past five years. These fluctuations may be indicative of changes in demand, production, or inventory management strategies within the company.

Further investigation and comparison of DOH with industry benchmarks and the company's own historical performance could provide more insights into the effectiveness of Applied Materials Inc.'s inventory management. Additionally, understanding the reasons behind the fluctuations in DOH, and any corresponding impacts on the company's financial performance, would be essential for a comprehensive analysis.