McCormick & Company Incorporated (MKC)
Days of inventory on hand (DOH)
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 3.68 | 3.69 | 3.41 | 3.25 | 3.06 | 3.04 | 2.92 | 2.94 | 3.12 | 3.23 | 3.07 | 3.12 | 3.23 | 3.20 | 3.46 | 3.86 | 3.81 | 4.00 | 3.79 | 3.94 | |
| DOH | days | 99.10 | 98.85 | 107.02 | 112.34 | 119.22 | 120.00 | 124.88 | 124.15 | 117.01 | 112.87 | 118.84 | 116.92 | 113.14 | 114.18 | 105.53 | 94.59 | 95.92 | 91.33 | 96.29 | 92.65 |
February 29, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.68
= 99.10
The days of inventory on hand (DOH) ratio for McCormick & Company Incorporated has shown some fluctuations over the past two years. The DOH ratio measures how many days, on average, a company holds its inventory before selling it.
From November 2019 to August 2020, the DOH ratio ranged from 91.33 days to 105.53 days, indicating a relatively stable inventory management during this period. However, there was a noticeable increase in the DOH ratio in the subsequent quarters, reaching a peak of 124.88 days in August 2022.
It is worth noting that holding inventory for a longer period can tie up cash and increase storage costs, potentially impacting the company's liquidity and profitability. The decreasing trend in DOH from November 2022 to May 2023 (120.00 days to 112.34 days) suggests an improvement in inventory turnover efficiency.
The most recent data shows a DOH of 99.10 days as of February 29, 2024, which is lower compared to the peak in August 2022 but still above historical averages. Monitoring and managing inventory levels effectively is critical for McCormick & Company to optimize working capital and enhance operational performance. Further analysis of the company's supply chain management and inventory control strategies may provide insights into improving the DOH ratio going forward.