Air Products and Chemicals Inc (APD)

Days of inventory on hand (DOH)

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Inventory turnover		15.50	20.22	17.80	14.47	15.46
DOH	days	23.55	18.05	20.50	25.22	23.60

September 30, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 15.50
= 23.55

Days of Inventory on Hand (DOH) is a crucial financial metric that measures the number of days a company takes to sell its inventory. A higher DOH value indicates a longer time to sell inventory, which may lead to increased carrying costs and potential obsolescence. Let's analyze the trend in Air Products & Chemicals Inc.'s DOH over the past five years:

1. The DOH for Air Products & Chemicals Inc. has shown an increasing trend from 2019 to 2023, with fluctuations in between.

2. In 2019, the DOH was 23.72 days, indicating that the company took approximately 23.72 days to sell its inventory on hand.

3. In 2020, the DOH increased slightly to 25.22 days, suggesting a slower turnover of inventory compared to the previous year.

4. The trend continued in 2021 with a DOH of 23.05 days, indicating a slight improvement in inventory turnover compared to the previous year.

5. However, in 2022, there was a significant decrease in DOH to 20.10 days, which suggests a more efficient management of inventory or potentially an increase in sales.

6. Finally, in 2023, the DOH increased sharply to 26.93 days, surpassing the levels seen in 2020 and 2021 and indicating a potential decrease in the efficiency of inventory management.

Based on the trend analysis, it is evident that Air Products & Chemicals Inc. has experienced fluctuations in its DOH over the past five years. The company should further investigate the reasons behind the increase in DOH in 2023 to identify any potential inefficiencies in inventory management and take appropriate measures to optimize inventory turnover and reduce carrying costs.