Synopsys Inc (SNPS)

Days of inventory on hand (DOH)

		Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020
Inventory turnover		3.58	3.24	3.23	3.06	3.46	3.80	4.24	4.94	5.02	4.62	4.45	4.28	3.76	3.53	3.65	3.51	4.13	4.71	4.49	5.09
DOH	days	101.97	112.48	112.84	119.38	105.60	95.95	86.14	73.89	72.72	78.96	82.08	85.33	97.00	103.34	100.02	104.07	88.34	77.48	81.38	71.77

October 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.58
= 101.97

Days of Inventory on Hand (DOH) measures how many days it takes for a company to sell its entire inventory. A higher number of days indicates that the company is taking longer to turn its inventory into sales, potentially tying up capital and increasing carrying costs.

Synopsys Inc's DOH has fluctuated over the past years, ranging from a low of 71.77 days to a high of 119.38 days. In recent quarters, the trend shows an increase in DOH, reaching 101.97 days as of October 31, 2024. This suggests that Synopsys is holding onto its inventory for a longer period, which could be due to various reasons such as changing market demand, production issues, or supply chain disruptions.

A high DOH can indicate inefficiencies in inventory management, leading to increased storage costs and potential risks of obsolescence. It may also tie up working capital that could otherwise be used more efficiently elsewhere in the business.

It is important for Synopsys to monitor and potentially optimize its inventory management practices to reduce DOH and improve cash flow efficiency. This could involve enhancing demand forecasting, streamlining production processes, or optimizing the supply chain to ensure that inventory is turned over more quickly.