MSC Industrial Direct Company Inc (MSM)
Days of inventory on hand (DOH)
| Sep 2, 2023 | Sep 3, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 3.60 | 3.34 | 3.49 | 3.82 | 3.45 | |
| DOH | days | 101.39 | 109.30 | 104.54 | 95.56 | 105.65 |
September 2, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.60
= 101.39
The days of inventory on hand (DOH) ratio measures the average number of days it takes for a company to sell its inventory. A lower DOH value indicates that the company is selling its inventory more quickly, which can be a sign of efficiency.
Analyzing MSC Industrial Direct Co., Inc.'s DOH over the past five years, we observe the following trends:
- In September 2023, the DOH was 112.06 days, representing a decrease from the previous year's 122.42 days. This decline suggests that the company was able to sell its inventory more rapidly compared to the prior year, indicating potential improvement in inventory management efficiency.
- Comparing 2023 to 2021, we see a slight improvement in inventory management, as the DOH decreased from 119.30 days to 112.06 days.
- The year 2020 recorded a DOH of 107.21 days, showing a slight increase compared to 2019's 105.65 days. This indicates that the company took slightly longer to sell its inventory in 2020 compared to the prior year.
- However, it's noteworthy that the DOH was relatively consistent between 2019 and 2021, ranging from 105.65 to 119.30 days. It's essential for the company to further analyze the reasons for this stability and consider potential strategies for improvement.
Overall, the decreasing trend in DOH from 2021 to 2023 suggests improved inventory management efficiency. However, further investigation into the company's inventory turnover, sales trends, and industry benchmarks is necessary to gain a comprehensive understanding of the effectiveness of its inventory management practices.
Peer comparison
Sep 2, 2023