Williams-Sonoma Inc (WSM)
Days of inventory on hand (DOH)
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 1.67 | 1.50 | 1.75 | 1.71 | 1.52 | |
| DOH | days | 218.63 | 243.59 | 208.79 | 212.86 | 240.07 |
January 28, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.67
= 218.63
Days of Inventory on Hand (DOH) is a key efficiency ratio used to evaluate how effectively a company manages its inventory. A lower value indicates that the company is selling its inventory more quickly, while a higher value suggests that the company may be experiencing slow-moving inventory or potential inventory management issues.
Over the past five years, Williams-Sonoma Inc's DOH has fluctuated, ranging from 208.79 days to 243.59 days. The company's inventory management shows some variability, with the lowest DOH reported in 2022 and the highest in 2023. Generally, a higher DOH value implies that the company is taking a longer time to convert its inventory into sales, which could tie up capital and lead to potential obsolescence or markdown risks.
It is important for Williams-Sonoma Inc to monitor and potentially optimize its inventory handling processes to achieve a more favorable DOH ratio, ensuring that its inventory turnover remains efficient and aligns with industry standards. This analysis can help the company enhance its liquidity, profitability, and overall operational performance.