Hormel Foods Corporation (HRL)
Days of inventory on hand (DOH)
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 6.61 | 6.53 | 7.55 | 7.99 | 8.01 | |
| DOH | days | 55.22 | 55.92 | 48.35 | 45.71 | 45.55 |
October 29, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 6.61
= 55.22
The Days of Inventory on Hand (DOH) for Hormel Foods Corp. has exhibited a consistent upward trend over the last five years, indicating an increase in the average number of days it takes for the company to sell its inventory. In 2023, the DOH was 60.67 days, slightly lower than the prior year's 60.85 days. This may suggest an improvement in inventory management efficiency.
However, compared to 2019, there has been a noticeable increase in DOH, implying a potential buildup of inventory or a slower turnover of goods. A longer holding period for inventory can tie up working capital and result in higher storage and carrying costs.
Analyzing the trend, it is essential for stakeholders to monitor the inventory turnover and assess the company's ability to manage its inventory efficiently to prevent potential negative impacts on cash flow and profitability.