Shake Shack Inc (SHAK)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 103.02 | 97.21 | 83.84 | 83.45 | 185.65 | |
| DOH | days | 3.54 | 3.75 | 4.35 | 4.37 | 1.97 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 103.02
= 3.54
To analyze Shake Shack Inc's Days of Inventory on Hand (DOH) over the past five years, we observe the following trends:
1. Decreasing Trend: Shake Shack Inc's DOH has shown a decreasing trend from 4.37 days in 2020 to 3.54 days in 2023. This suggests that the company has been more efficient in managing its inventory levels over this period.
2. Fluctuations: While there has been an overall decreasing trend, we can see some fluctuations in DOH from year to year. For example, there was a notable decrease in 2019 to 1.97 days, followed by a slight increase in 2020 before continuing the downward trend.
3. Efficiency Improvement: The decreasing trend in DOH indicates that Shake Shack Inc has been able to sell its inventory at a faster pace in recent years. This could be due to improved inventory management practices, more accurate demand forecasting, or streamlined supply chain processes.
4. Comparison: When compared to the industry average or competitors, Shake Shack Inc's DOH of around 3-4 days indicates that the company is able to convert its inventory into sales relatively quickly, which is generally seen as a positive sign in terms of operational efficiency.
In conclusion, the decreasing trend in Shake Shack Inc's Days of Inventory on Hand over the past five years reflects improved efficiency in managing inventory levels, which can contribute to cost savings and better overall financial performance.
Peer comparison
Dec 31, 2023