Phillips 66 (PSX)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		34.91	47.00	31.52	16.68	26.33
DOH	days	10.46	7.77	11.58	21.89	13.86

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 34.91
= 10.46

The days of inventory on hand (DOH) for Phillips 66 fluctuated over the past five years. In 2023, the company had an average of 10.69 days of inventory on hand compared to 7.98 days in 2022, indicating an increase in the number of days it takes to sell its inventory. This could suggest potential inefficiencies in inventory management or a buildup of excess inventory.

In 2021, the DOH was 12.13 days, slightly higher than in 2023. This may indicate that Phillips 66 was holding onto inventory for a longer period, which could tie up working capital and lead to increased storage costs.

The significant increase in DOH to 24.62 days in 2020 compared to the previous years is a notable outlier. This spike could be attributed to various factors such as disruptions in the supply chain, decreased demand, or misjudgments in inventory planning.

In 2019, the DOH was 14.43 days, falling between the extremes of 2020 and the more recent years. This suggests a moderate level of inventory management efficiency during that period.

Overall, the trend in Phillips 66's days of inventory on hand indicates variability in inventory management effectiveness over the past five years, with potential areas for improvement to optimize working capital and operational efficiency.