PriceSmart Inc (PSMT)

Days of inventory on hand (DOH)

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Inventory turnover		1.18	1.10	1.20	1.24	1.19	1.02	1.10	1.10	1.07	0.99	1.25	3.06	2.98	2.68	3.21	3.67	3.05	2.51	2.93	2.93
DOH	days	309.49	333.28	304.34	294.03	305.68	357.98	330.46	331.43	340.98	367.45	292.06	119.38	122.64	136.27	113.83	99.56	119.67	145.39	124.58	124.54

February 29, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.18
= 309.49

Days of Inventory on Hand (DOH) is a key efficiency ratio that measures how many days, on average, a company holds its inventory before selling it. A lower DOH indicates faster inventory turnover and better management of inventory levels.

Analyzing the historical trend of PriceSmart Inc's DOH, we observe significant fluctuations over the past few years. The DOH ranged from as low as 99.56 days in May 2020 to as high as 367.45 days in Nov 2021.

In recent periods, there has been a general improvement in inventory management efficiency as indicated by decreasing DOH figures. For instance, the DOH decreased from 333.28 days in Nov 2023 to 309.49 days in Feb 2024, suggesting a reduction in the number of days it takes to sell its inventory.

It is important to note the extremely low DOH figures in Aug 2021 and May 2021, indicating a very rapid turnover of inventory during these periods. This could be due to aggressive sales strategies, effective demand forecasting, or inventory clearance initiatives undertaken by the company.

Overall, PriceSmart Inc's DOH fluctuates significantly over time, and management should continue to monitor and optimize inventory levels to ensure efficient operations and maximize profitability.