Emerson Electric Company (EMR)

Days of inventory on hand (DOH)

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Inventory turnover		6.40	9.44	7.55	7.48	8.23
DOH	days	57.07	38.66	48.36	48.82	44.36

September 30, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 6.40
= 57.07

Days of Inventory on Hand (DOH) is a measure of how efficiently a company manages its inventory. A higher DOH indicates that the company is taking longer to sell its inventory, which may tie up valuable resources and increase carrying costs. Conversely, a lower DOH suggests efficient inventory management and quicker turnover.

Emerson Electric Co.'s DOH has exhibited some variability in recent years. In 2023, the company's DOH increased to 94.62 days from 69.90 days in 2022, indicating a significant increase in the time it takes for the company to sell its inventory. This may be a cause for concern as it suggests a potential slowdown in inventory turnover and a higher risk of obsolescence or inventory write-downs.

Comparing 2023 to 2021 and 2020, there has been a noticeable upward trend in DOH, indicating a potential deterioration in inventory management efficiency over the past few years. However, the DOH in 2023 is still lower than in 2019, suggesting that the company may have made improvements since then.

It would be important for stakeholders to closely monitor Emerson Electric Co.'s inventory management practices and seek explanations for the increasing DOH trend to ensure that the company can efficiently utilize its resources and adapt to changing market conditions.