The Boeing Company (BA)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 6.93 | 6.53 | 5.53 | 5.52 | 6.80 | |
| DOH | days | 52.67 | 55.87 | 66.00 | 66.10 | 53.70 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 6.93
= 52.67
To analyze Boeing Co.'s Days of Inventory on Hand (DOH), we are examining the efficiency of the company in managing its inventory. DOH is calculated by dividing the average inventory by the cost of goods sold and then multiplying the result by the number of days in the period. A lower DOH indicates that the company is selling its inventory more quickly.
Looking at the trend over the past five years, we observe that Boeing Co.'s DOH has shown some fluctuation. The DOH increased from 388.26 days in 2019 to 485.68 days in 2021, indicating that the company took longer to sell its inventory during this period. However, in the subsequent years, there was a decrease in DOH, with the figure reaching 415.38 days in 2023. This downward trend suggests that the company improved its inventory management efficiency during these years.
It is essential to note that while a decreasing DOH can signify improved inventory management, an excessively low DOH can also lead to the risk of stockouts and potential disruptions to the supply chain. Therefore, a balanced approach to inventory management is crucial for Boeing Co. to ensure efficient operations while avoiding the cost of excess inventory or shortages.
In conclusion, the trend of Boeing Co.'s DOH indicates fluctuations in inventory management efficiency over the past five years. The company's efforts to manage inventory more effectively are evidenced by the decreasing DOH in recent years, although it is important for the company to maintain a balance to avoid potential operational risks.
Peer comparison
Dec 31, 2023