Merck & Company Inc (MRK)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		4.64	5.31	4.30	5.37	4.66
DOH	days	78.61	68.80	84.84	68.00	78.32

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.64
= 78.61

The days of inventory on hand (DOH) for Merck & Co Inc have shown fluctuations over the past five years. In 2023, the DOH increased to 143.91 days from 123.92 days in 2022. This indicates that the company held inventory for a longer period in 2023. However, compared to 2021 where the DOH was at 159.46 days, the inventory management improved in 2023.

It is important to note that a higher DOH may suggest that the company is carrying excess inventory, which could tie up capital and increase holding costs. Conversely, a lower DOH may indicate efficient inventory management but may also risk stockouts and potential lost sales.

Overall, a downward trend in DOH over time could indicate improved inventory turnover and efficiency in managing inventory levels, while an increase may signal challenges in managing inventory effectively. Further analysis is needed to understand the underlying factors contributing to the changes in DOH and their impact on the company's operations and financial performance.