Microchip Technology Inc (MCHP)

Days of inventory on hand (DOH)

		Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Inventory turnover		2.01	2.15	2.16	2.11	2.07	2.27	2.48	2.70	2.78	2.98	3.07	3.09	3.10	3.05	3.07	3.10	2.96	2.86	2.89	3.21
DOH	days	182.04	169.93	169.33	173.14	176.44	160.44	147.07	135.11	131.51	122.56	118.94	118.29	117.85	119.66	119.07	117.81	123.16	127.51	126.28	113.62

March 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.01
= 182.04

Days of Inventory on Hand (DOH) measures how many days it takes for a company to sell its entire inventory. A higher DOH indicates that the company is holding onto its inventory for a longer period, which may suggest inefficiencies in managing and selling inventory.

Analyzing Microchip Technology Inc's DOH over the past several quarters, we observe some fluctuations. In recent quarters, the company's DOH has been around the range of 160 to 180 days, indicating that on average it takes Microchip approximately 160 to 180 days to sell its inventory.

The trend shows an increasing DOH from the third quarter of 2019 to the first quarter of 2020, followed by a decrease and relatively stable numbers until the third quarter of 2022. From the third quarter of 2022 to the first quarter of 2024, there has been a slight increasing trend in DOH.

A high or increasing DOH could imply overstocking, obsolete inventory, or lower-than-expected demand for the company's products. Conversely, a lower DOH could suggest efficient inventory management, quick inventory turnover, and better liquidity.

Investors and analysts should further investigate the reasons behind the fluctuations in DOH to understand whether they are attributable to operational efficiencies or potential issues in inventory management that may impact the company's financial performance and profitability in the future.