PriceSmart Inc (PSMT)

Days of inventory on hand (DOH)

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Inventory turnover		1.18	1.20	1.10	1.25	10.36
DOH	days	309.82	304.34	330.46	292.06	35.22

August 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.18
= 309.82

The days of inventory on hand (DOH) for PriceSmart Inc has shown a fluctuating trend over the past five years. In 2024, the DOH increased to 309.82 days compared to 304.34 days in 2023. This suggests that the company is holding inventory for a longer period before it is sold, which may tie up capital and increase carrying costs.

The DOH reached its peak in 2022 at 330.46 days before decreasing in 2023, indicating potential inventory management challenges during that period. In contrast, the DOH was significantly lower in 2020 at 35.22 days, highlighting a more efficient inventory turnover process.

Overall, the DOH for PriceSmart Inc has been volatile, reflecting potential fluctuations in demand, supply chain disruptions, or inventory management strategies. It is essential for the company to optimize its inventory levels to strike a balance between meeting customer demand and minimizing carrying costs to enhance overall operational efficiency and profitability.