Domino’s Pizza Inc (DPZ)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Sep 10, 2023 | Jun 18, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 11, 2022 | Jun 19, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 12, 2021 | Jun 20, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 6, 2020 | Jun 14, 2020 | Mar 22, 2020 | Dec 31, 2019 | Sep 8, 2019 | Jun 16, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 33.17 | 39.73 | 43.06 | 41.64 | 35.41 | 39.20 | 39.48 | 34.96 | 39.06 | 41.10 | 44.72 | 40.53 | 37.83 | 36.71 | 34.46 | 45.61 | 41.85 | 42.76 | 48.95 | 47.26 | |
| DOH | days | 11.00 | 9.19 | 8.48 | 8.77 | 10.31 | 9.31 | 9.25 | 10.44 | 9.34 | 8.88 | 8.16 | 9.01 | 9.65 | 9.94 | 10.59 | 8.00 | 8.72 | 8.54 | 7.46 | 7.72 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 33.17
= 11.00
Days of Inventory on Hand (DOH) is a key financial ratio that measures how many days it takes for a company to sell its average inventory. A lower DOH value indicates that the company is selling its inventory faster, which is generally preferable as it minimizes the risk of inventory obsolescence and ties up less capital in inventory.
Analyzing Dominos Pizza Inc's DOH over the past eight quarters, we observe a fluctuating trend. In Q4 2023, the DOH increased to 11.00 days compared to the previous quarter, indicating that Dominos Pizza Inc took longer to sell its inventory. This could potentially be a sign of slower sales or higher inventory levels.
Looking at the trend over the past year, we see that the DOH has generally been in the range of 8 to 10 days, with some variations. Q2 and Q3 of 2023 showed a decline in DOH compared to the previous quarters, which could suggest improved efficiency in managing inventory or increased sales volumes during those periods.
It is essential for Dominos Pizza Inc to closely monitor its DOH to ensure optimal inventory management. A consistently high DOH could indicate excess inventory levels, leading to increased holding costs and potential write-downs. On the other hand, a very low DOH may point to stockouts and lost sales opportunities.
Overall, Dominos Pizza Inc should aim to strike a balance in managing its inventory levels to optimize operational efficiency, minimize costs, and meet customer demand effectively. Continued monitoring and analysis of the DOH ratio will be crucial for the company to make informed inventory management decisions.
Peer comparison
Dec 31, 2023