Shake Shack Inc (SHAK)
Days of inventory on hand (DOH)
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Sep 23, 2020 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 159.27 | 203.72 | 179.96 | 161.70 | 132.23 | 126.90 | 135.66 | 155.36 | 157.01 | 160.48 | 140.24 | 122.41 | 112.57 | 115.39 | 102.93 | 114.88 | 98.35 | 114.69 | 118.57 | 133.46 | |
| DOH | days | 2.29 | 1.79 | 2.03 | 2.26 | 2.76 | 2.88 | 2.69 | 2.35 | 2.32 | 2.27 | 2.60 | 2.98 | 3.24 | 3.16 | 3.55 | 3.18 | 3.71 | 3.18 | 3.08 | 2.73 |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 159.27
= 2.29
Days of inventory on hand (DOH) is a key financial ratio that measures the number of days it takes for a company to sell its average inventory stock. A lower DOH value indicates that the company is able to turn over its inventory more quickly, which is generally preferred as it signifies efficient inventory management.
Analyzing the DOH trend for Shake Shack Inc from June 30, 2020, to December 31, 2024, we observe fluctuations in the ratio. The trend starts at 2.73 days on June 30, 2020, and rises gradually to reach a peak of 3.71 days on December 31, 2020. This increase could suggest a potential slowdown in inventory turnover during this period.
Subsequently, the DOH ratio fluctuates over the following quarters, showing some volatility but generally staying above 3 days until the end of June 2021. From that point onwards, a decreasing trend is observed, with the DOH ratio gradually reducing to 1.79 days on September 30, 2024.
The decreasing trend in the DOH ratio from June 2021 to September 2024 indicates that Shake Shack Inc has improved its inventory management efficiency, achieving a faster inventory turnover. The ability to reduce the DOH ratio signifies better control over inventory levels, potentially leading to cost savings and improved cash flow.
Overall, the decreasing trend in Shake Shack Inc's DOH ratio over the analyzed period reflects positive developments in the company's inventory management practices, indicating a more efficient use of its inventory resources.
Peer comparison
Dec 31, 2024