HP Inc (HPQ)
Days of inventory on hand (DOH)
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 6.15 | 6.65 | 6.31 | 7.75 | 8.30 | |
| DOH | days | 59.34 | 54.87 | 57.83 | 47.11 | 43.98 |
October 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 6.15
= 59.34
To analyze HP Inc's days of inventory on hand (DOH), we will calculate the average DOH for the past five years by taking the sum of the DOH for each year and dividing it by 5.
Average DOH = (59.34 + 54.73 + 57.81 + 47.11 + 43.98) / 5
= 53.99 days
The average DOH indicates that, on average, HP Inc holds inventory for approximately 54 days before selling it.
Comparing the DOH over the past five years, we observe an increasing trend from 43.98 days in 2019 to 59.34 days in 2023. This suggests that HP Inc is holding inventory for a longer period, which may tie up the company's capital and increase the risk of obsolescence.
A high DOH can also indicate inefficiencies in inventory management, potential overstocking, or a slowdown in sales. Conversely, a low DOH can imply stockouts or lost sales opportunities. Therefore, it is essential for HP Inc to strike a balance in managing its inventory levels effectively.
In conclusion, HP Inc's increasing trend in DOH over the past five years warrants attention to optimize inventory management and minimize any adverse impact on the company's financial performance and overall operations.
Peer comparison
Oct 31, 2023