Broadcom Inc (AVGO)

Days of inventory on hand (DOH)

		Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Nov 1, 2020	Nov 3, 2019
Inventory turnover		5.86	5.77	8.18	10.34	11.57
DOH	days	62.25	63.25	44.64	35.30	31.54

October 29, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 5.86
= 62.25

To analyze the days of inventory on hand (DOH) for Broadcom Inc over the past five years, we can see a variation in the efficiency of managing inventory.

The DOH represents the average number of days a company holds its inventory before selling it. A lower DOH indicates better inventory management and a more efficient use of resources.

In 2019, Broadcom Inc had a DOH of 47.45 days, which increased to 56.17 days in 2020, indicating a decrease in inventory turnover efficiency. However, in 2021, the DOH decreased to 66.10 days, showing improved inventory management. The trend changed in 2022 with an increase to 85.10 days, signaling a potential issue in inventory management efficiency. In 2023, the DOH decreased to 74.72 days, indicating some improvement but still higher than the 2019 and 2021 levels.

The fluctuation in DOH over the years suggests that Broadcom Inc's inventory management may not have been consistent. A high DOH can tie up capital and lead to higher carrying costs, while a low DOH can result in stockouts and lost sales. Further analysis of the industry and company-specific factors would provide a more comprehensive understanding of the inventory management effectiveness.