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GuruFocus has detected 4 Warning Signs with Honda Motor Co Ltd $HMC.
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Honda Motor Co Ltd (NYSE:HMC)
Days Inventory
42.27 (As of Mar. 2017)

Honda Motor Co Ltd's average inventory for the three months ended in Mar. 2017 was $12,015 Mil. Honda Motor Co Ltd's cost of goods sold for the three months ended in Mar. 2017 was $25,936 Mil. Hence, Honda Motor Co Ltd's days inventory for the three months ended in Mar. 2017 was 42.27.

HMC' s Days Inventory Range Over the Past 10 Years
Min: 43.91   Max: 62.01
Current: 43.91

43.91
62.01

During the past 13 years, Honda Motor Co Ltd's highest Days Inventory was 62.01. The lowest was 43.91. And the median was 51.27.

HMC's Days Inventory is ranked higher than
66% of the 1204 Companies
in the Global Auto Manufacturers industry.

( Industry Median: 57.00 vs. HMC: 43.91 )

Honda Motor Co Ltd's days inventory increased from Mar. 2016 (42.10) to Mar. 2017 (42.27). It might indicate that Honda Motor Co Ltd's sales slowed down.

Inventory can be measured by Days Sales of Inventory (DSI). Honda Motor Co Ltd's days sales of inventory (DSI) for the three months ended in Mar. 2017 was 32.89.

Inventory turnover measures how fast the company turns over its inventory within a year. Honda Motor Co Ltd's inventory turnover for the three months ended in Mar. 2017 was 2.16.

Inventory to revenue ratio determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue. Honda Motor Co Ltd's inventory to revenue ratio for the three months ended in Mar. 2017 was 0.36.


Definition

Days Inventory indicates the number of days of goods in sales that a company has in the inventory.

Honda Motor Co Ltd's Days Inventory for the fiscal year that ended in Mar. 2017 is calculated as

Days Inventory (A: Mar. 2017 )
=Average Inventory / COGS*Days in Period
=( (Inventory (A: Mar. 2016 ) + Inventory (A: Mar. 2017 )) / 2 ) / COGS (A: Mar. 2017 )*Days in Period
=( (11629.0820027 + 12080.8739201) / 2 ) / 96229.0542126*365
=11854.9779614 / 96229.0542126*365
=44.97

Honda Motor Co Ltd's Days Inventory for the quarter that ended in Mar. 2017 is calculated as:

Days Inventory (Q: Mar. 2017 )
=Average Inventory / COGS*Days in Period
=( (Inventory (Q: Dec. 2016 ) + Inventory (Q: Mar. 2017 )) / 2 ) / COGS (Q: Mar. 2017 )*Days in Period
=( (11948.9457155 + 12080.8739201) / 2 ) / 25935.8818242*365 / 4
=12014.9098178 / 25935.8818242*365 / 4
=42.27

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

An increase of Days Inventory may indicate the company's sales slowed.

1. Inventory can be measured by Days Sales of Inventory (DSI).

Honda Motor Co Ltd's Days Sales of Inventory for the three months ended in Mar. 2017 is calculated as

Days Sales of Inventory (DSI)=Average Inventory/Revenue*Days in Period
=12014.9098178/33329.3539917*365 / 4
=32.89

2. Inventory Turnover measures how fast the company turns over its inventory within a year.

Honda Motor Co Ltd's Inventory Turnover for the three months ended in Mar. 2017 is calculated as

Inventory Turnover=Cost of Goods Sold / Average Inventory
=25935.8818242 / 12014.9098178
=2.16

3. Inventory to Revenue determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue.

Honda Motor Co Ltd's Inventory to Revenue for the three months ended in Mar. 2017 is calculated as

Inventory to Revenue=Average Inventory / Revenue
=12014.9098178 / 33329.3539917
=0.36

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Be Aware

A lot of business are seasonable. It makes more sense to compare Days Inventory from the same period in the previous year instead of from the previous quarter.


Related Terms

Cost of Goods Sold, Inventory, Revenue, Inventory Turnover, Inventory to Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Honda Motor Co Ltd Annual Data

Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16Mar17
DaysInventory 47.4059.1659.4348.9359.9559.7650.3654.2143.7844.97

Honda Motor Co Ltd Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DaysInventory 51.4550.6147.3844.9445.5542.1041.8443.9646.7042.27
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