Cardinal Health Inc (CAH)
Days of inventory on hand (DOH)
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 14.67 | 12.29 | 11.18 | 10.67 | 11.07 | |
| DOH | days | 24.88 | 29.70 | 32.65 | 34.21 | 32.98 |
June 30, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 14.67
= 24.88
Based on the data provided, Cardinal Health Inc's days of inventory on hand (DOH) has improved over the past five years. The trend shows a decreasing pattern from 32.98 days in 2020 to 24.88 days in 2024. This indicates that the company has been able to manage its inventory more efficiently, carrying less inventory on hand relative to its sales.
A decreasing DOH can be a positive sign as it suggests that Cardinal Health is able to sell its inventory more quickly, reducing the risk of obsolete inventory or carrying costs. It may also indicate effective inventory management practices, such as better forecasting, inventory control, or just-in-time inventory systems.
However, it is important to note that a very low DOH could also signal potential issues, such as stockouts or insufficient inventory to meet demand. Therefore, Cardinal Health should continue to monitor and optimize its inventory levels to strike the right balance between carrying costs and meeting customer demand effectively.
Peer comparison
Jun 30, 2024