Photronics Inc (PLAB)

Days of inventory on hand (DOH)

		Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Inventory turnover		12.58	11.77	10.12	9.31	10.11
DOH	days	29.01	31.00	36.08	39.20	36.11

October 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 12.58
= 29.01

To analyze the days of inventory on hand (DOH) for Photronics, Inc., we must consider the trend over the last five years. The company's DOH has shown a declining pattern, dropping from 44.00 days in 2019 to 32.80 days in 2023. This suggests that the company has been more efficient in managing its inventory, possibly through improved inventory management and control processes.

A decreasing DOH indicates that the company can sell its inventory at a faster rate, which could lead to lower carrying costs and potential obsolescence risk. This trend may also reflect improved forecasting and inventory turnover strategies, contributing to better working capital management.

It is important to note that while a declining DOH is generally positive, an excessively low DOH could indicate inventory shortages and potential missed sales opportunities. Therefore, it is essential for the company to strike a balance between carrying just enough inventory to meet customer demand without having excess inventory tying up valuable resources.