Toll Brothers Inc (TOL)

Days of inventory on hand (DOH)

		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	Oct 31, 2019	Jul 31, 2019	Apr 30, 2019
Inventory turnover		0.88	0.92	0.96	0.97	0.96	1.00	0.89	0.91	0.93	0.98	0.90	0.84	0.84	0.85	0.80	0.79	0.80	0.83	0.82	0.86
DOH	days	417.05	398.34	380.42	378.15	381.51	363.60	411.48	400.09	394.56	371.88	406.27	432.34	432.45	428.27	458.26	460.76	454.19	439.18	442.94	424.53

January 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 0.88
= 417.05

Days of Inventory on Hand (DOH) measures how many days, on average, a company holds its inventory before selling it. A lower DOH indicates faster inventory turnover, which is generally more favorable as it implies efficient inventory management.

Analyzing Toll Brothers Inc.'s DOH over the past eight quarters, we observe fluctuations in the metric. In Q1 2024, the DOH increased to 470.90 days from 449.14 days in Q4 2023. This suggests a potential slowdown in inventory turnover efficiency.

Comparing Q1 2024 to the previous year's Q1 2023, where DOH was 428.92 days, the current figure indicates a notable increase in the number of days it takes Toll Brothers to sell its inventory.

Further analysis reveals that in the last three quarters of 2023, DOH ranged between 423.76 days and 425.87 days, which implies relatively stable inventory management during that period.

In Q4 2022, DOH was at its lowest point in the provided data at 409.24 days, showcasing improved efficiency in inventory turnover compared to the current period.

While fluctuations are common in the housing industry due to seasonality and market conditions, it would be beneficial for Toll Brothers to closely monitor their inventory management practices to aim for lower DOH figures, indicating better control over their inventory levels and improved operational efficiency.