Simply Good Foods Co (SMPL)

To analyze Simply Good Foods Co's days of inventory on hand (DOH) from 2019 to 2023, we examine the trend and implications of the DOH ratios over this period. DOH measures the number of days it takes for a company to sell its entire inventory. A lower DOH indicates a shorter time to sell inventory, which is generally favorable as it implies efficient inventory management.

From 2019 to 2020, the DOH decreased from 45.43 days to 43.81 days, which suggests an improvement in inventory turnover efficiency. However, from 2020 to 2021, the DOH increased to 59.58 days, indicating a less favorable trend and potentially signaling inefficiencies in inventory management. This increase continued in 2022, with DOH rising to 63.34 days, suggesting a longer time to sell inventory.

In the most recent period, 2023, the DOH decreased to 53.92 days, reflecting a positive shift toward more efficient inventory turnover compared to the previous year. Overall, the trend in DOH indicates fluctuations in the company's inventory management efficiency, with improvements from 2019 to 2020 followed by increases in DOH from 2020 to 2022 and a partial recovery in 2023.

It is important for Simply Good Foods Co to closely monitor its inventory levels and sales to ensure optimal inventory management and cost control. Additionally, a further analysis of factors influencing inventory turnover, such as demand patterns, supply chain disruptions, and product lifecycles, would provide valuable insights for potential improvements in inventory management.

Peer comparison

Aug 26, 2023