Murphy Oil Corporation (MUR)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		3.98	6.51	6.75	21.77	4.04
DOH	days	91.76	56.08	54.05	16.76	90.38

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.98
= 91.76

Based on the data provided, we can observe a significant increase in Murphy Oil Corp.'s days of inventory on hand (DOH) from 2022 to 2023. In 2022, the DOH was 115.69 days, which then increased to 384.58 days in 2023. This substantial rise may indicate that Murphy Oil Corp. is holding onto its inventory for a longer period before selling it.

A high DOH ratio could suggest potential issues such as overstocking, obsolete inventory, or a slowdown in sales. It also implies that the company may face liquidity challenges as it ties up its funds in maintaining excess inventory levels.

It is essential for Murphy Oil Corp. to manage its inventory effectively to optimize its cash flow, reduce carrying costs, and prevent potential losses from inventory write-downs. Further analysis and comparison with industry benchmarks and historical trends would provide a more comprehensive understanding of the company's inventory management efficiency.