Dollar General Corporation (DG)

Days of inventory on hand (DOH)

		Feb 2, 2024	Nov 3, 2023	Aug 4, 2023	May 5, 2023	Feb 3, 2023	Oct 28, 2022	Jul 29, 2022	Apr 29, 2022	Jan 28, 2022	Oct 29, 2021	Jul 30, 2021	Apr 30, 2021	Jan 29, 2021	Oct 30, 2020	Jul 31, 2020	May 1, 2020	Jan 31, 2020	Nov 1, 2019	Aug 2, 2019	May 3, 2019
Inventory turnover		4.87	4.63	4.45	4.48	5.11	4.63	4.65	5.18	5.52	5.79	5.73	5.90	5.75	5.79	6.41	5.00	4.08	4.15	4.10	5.84
DOH	days	75.00	78.91	82.08	81.38	71.49	78.78	78.55	70.50	66.10	63.02	63.67	61.83	63.43	63.06	56.91	72.94	89.46	87.96	88.96	62.50

February 2, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.87
= 75.00

Days of Inventory on Hand (DOH) is a key financial ratio that measures the average number of days a company holds its inventory before selling it. A lower DOH typically indicates efficient inventory management and faster inventory turnover, while a higher DOH suggests slower inventory turnover and potential liquidity issues.

Analyzing Dollar General Corporation's historical DOH data reveals fluctuations over time. From November 2019 to February 2020, the DOH ranged from 87.96 days to 72.94 days, reflecting a relatively high and fluctuating inventory holding period. Subsequently, there was a significant decrease to 56.91 days in July 2020, indicating improved efficiency in managing inventory levels.

However, the trend reversed, with DOH increasing again to 78.55 days in October 2020 and remaining above 60 days for the following quarters until May 2023, peaking at 82.08 days in August 2023. This upward trend may suggest potential challenges in inventory management, such as overstocking or slowing sales.

It is noteworthy that there was a slight improvement in inventory efficiency in the latest observations, with DOH declining to 75.00 days in February 2024. This reduction could indicate a positive shift towards optimizing inventory levels and improving working capital management.

Overall, monitoring Dollar General's DOH trend is crucial for assessing its inventory management effectiveness, operational efficiency, and potential impacts on cash flow and profitability. Continued focus on maintaining an optimal balance between inventory levels and sales demand will be essential for sustainable business performance.