Johnson & Johnson (JNJ)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		4.86	4.92	5.82	5.96	6.16
DOH	days	75.09	74.17	62.71	61.24	59.22

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.86
= 75.09

Johnson & Johnson's days of inventory on hand (DOH) has exhibited an increasing trend over the past five years, as evidenced by the figures of 119.48 days in December 2019, 119.98 days in January 2021, 126.99 days in January 2022, 146.56 days in January 2023, and 153.70 days in December 2023. This trend indicates that the company is taking longer to sell its inventory, potentially tying up more capital in inventory and facing higher carrying costs.

A high DOH ratio could suggest inefficiencies in inventory management, such as overstocking or slow turnover of products. It may also indicate weaker demand or challenges in forecasting sales accurately.

It is important for Johnson & Johnson to closely monitor its inventory levels and strive to optimize its supply chain to reduce the DOH ratio over time. By efficiently managing its inventory, the company can improve cash flow, reduce storage costs, and enhance overall operational performance.