Hormel Foods Corporation (HRL)
Days of inventory on hand (DOH)
| Oct 31, 2024 | Oct 27, 2024 | Oct 31, 2023 | Oct 29, 2023 | Oct 31, 2022 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 6.28 | 6.93 | 6.02 | 6.61 | 6.00 | |
| DOH | days | 58.12 | 52.65 | 60.67 | 55.22 | 60.85 |
October 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 6.28
= 58.12
Hormel Foods Corporation's days of inventory on hand (DOH) has shown fluctuations over the past few years. Starting at 60.85 days on October 31, 2022, the DOH decreased to 55.22 days by October 29, 2023. This reduction suggests more efficient management of inventory during that period. However, on October 31, 2023, the DOH increased to 60.67 days, indicating a potential buildup of inventory.
Subsequently, there was a notable improvement as of October 27, 2024, with the DOH declining to 52.65 days, which could suggest better inventory control or increased sales efficiency. However, by October 31, 2024, the DOH rose again to 58.12 days, indicating a potential need for the company to assess and optimize its inventory management practices to avoid excessive levels of inventory relative to sales.
Overall, monitoring and managing inventory levels effectively is crucial for Hormel Foods Corporation to maintain operational efficiency and financial performance, as high DOH can tie up capital and lead to increased carrying costs, while low DOH may risk stockouts or disruptions in the supply chain.