Smart Global Holdings Inc (SGH)

Days of inventory on hand (DOH)

		Mar 1, 2024	Dec 1, 2023	Aug 25, 2023	May 26, 2023	Feb 24, 2023	Nov 25, 2022	Aug 26, 2022	May 27, 2022	Feb 25, 2022	Nov 26, 2021	Aug 27, 2021	May 28, 2021	Feb 26, 2021	Nov 27, 2020	May 29, 2020	Feb 28, 2020	Nov 29, 2019	Aug 30, 2019	May 31, 2019	Mar 1, 2019
Inventory turnover		5.29	5.01	6.97	7.13	5.63	3.94	6.10	3.33	3.63	3.47	2.68	4.27	5.70	7.12	5.68	6.10	6.27	9.12	8.64	7.03
DOH	days	69.02	72.83	52.40	51.17	64.81	92.66	59.80	109.56	100.62	105.26	135.96	85.45	64.05	51.27	64.22	59.88	58.24	40.01	42.25	51.94

March 1, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 5.29
= 69.02

The Days of Inventory on Hand (DOH) ratio is a measure of how efficiently a company manages its inventory by indicating the number of days it takes for inventory to be sold or used. Analyzing Smart Global Holdings Inc's DOH over the provided historical periods reveals fluctuations in inventory management.

The trend indicates that Smart Global Holdings Inc has experienced varying levels of efficiency in managing its inventory. For example, there was a significant improvement in inventory management from March 1, 2019, to August 26, 2022, as the DOH decreased from 58.24 days to 59.80 days. This suggests that the company may have been more effective in selling or utilizing its inventory during this period.

However, from August 26, 2022, to November 26, 2023, the DOH increased to 92.66 days, indicating a potential slowdown in inventory turnover. This could imply that the company was holding inventory for a longer period before selling or using it, which may tie up working capital and lead to higher carrying costs.

Subsequently, from November 26, 2023, to December 1, 2023, there was a slight decrease in DOH to 72.83 days, suggesting a potential improvement in inventory management efficiency. This trend could be attributed to better inventory forecasting or sales strategies that led to a faster turnover of inventory.

Overall, monitoring Smart Global Holdings Inc's DOH over time provides valuable insights into the company's inventory management practices. It is crucial for the company to strive for a balance between meeting customer demand and minimizing excess inventory to maintain optimal operational efficiency and profitability.