McDonald’s Corporation (MCD)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		92.43	90.10	83.90	76.37	78.21
DOH	days	3.95	4.05	4.35	4.78	4.67

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 92.43
= 3.95

The days of inventory on hand (DOH) for McDonald’s Corporation have shown a decreasing trend over the past five years, with the figures standing at 4.67 days as of December 31, 2020, decreasing to 3.95 days as of December 31, 2024. This indicates that the company has been more efficient in managing its inventory levels, taking fewer days to sell its inventory on hand.

A decreasing DOH is generally a positive sign as it suggests that the company is effectively managing its inventory and not tying up excess capital in unsold goods. This could lead to cost savings and improved cash flow for the company. McDonald’s ability to reduce its DOH over the years reflects its effective inventory management practices, which is crucial in the highly competitive and fast-paced food industry.

Overall, the declining trend in McDonald’s Corporation's days of inventory on hand signifies improved efficiency in inventory turnover, which is a positive indicator of the company's operational performance and financial health.