Dollar General Corporation (DG)

Days of inventory on hand (DOH)

		Jan 31, 2025	Feb 2, 2024	Jan 31, 2024	Feb 3, 2023	Jan 31, 2023
Inventory turnover		4.26	5.18	3.86	5.11	3.85
DOH	days	85.67	70.42	94.65	71.49	94.82

January 31, 2025 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.26
= 85.67

The days of inventory on hand (DOH) for Dollar General Corporation over the past few years have shown some fluctuations. In January 2023, the DOH was 94.82 days, decreased to 71.49 days by February 2023, increased to 94.65 days by January 2024, decreased again to 70.42 days by February 2024, and then settled at 85.67 days by January 2025.

The trend in DOH indicates some variability in managing inventory levels. A higher DOH suggests that the company is holding onto inventory for a longer period, which may tie up working capital and lead to higher holding costs. Conversely, a lower DOH may indicate efficient inventory management but could also raise concerns about stockouts and potential loss of sales.

It is essential for Dollar General Corporation to strike a balance in managing its inventory to optimize liquidity, reduce carrying costs, and ensure timely product availability to meet customer demand effectively. Monitoring and analyzing trends in DOH can help the company fine-tune its inventory management strategies for sustained operational efficiency and profitability.