Toro Co (TTC)
Days of inventory on hand (DOH)
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 3.82 | 3.78 | 4.69 | 4.56 | 4.34 | |
| DOH | days | 95.49 | 96.57 | 77.76 | 80.13 | 84.01 |
October 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.82
= 95.49
To analyze Toro Co.'s days of inventory on hand (DOH), we will use the formula:
DOH = (Average Inventory / Cost of Goods Sold) x Number of Days in the Period
Using the data provided, we can see an increasing trend in the days of inventory on hand over the past five years. In 2019, the DOH was 113.80 days, which increased to 108.79 days in 2020, 102.79 days in 2021, 127.46 days in 2022, and further increased to 133.43 days in 2023.
This upward trend in DOH indicates that Toro Co. is taking longer to sell its inventory. A high DOH can suggest poor inventory management, potentially leading to increased holding costs and the risk of obsolescence.
A further analysis of the components that contribute to this trend, such as changes in inventory levels and cost of goods sold, is necessary to better understand the reasons behind the increasing DOH and to assess the efficiency of Toro Co.'s inventory management.