Alkermes Plc (ALKS)

Days of inventory on hand (DOH)

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Inventory turnover		3.70	3.88	4.14	5.13	5.03	4.82	4.74	5.19	5.44	5.36	5.30	5.56	5.56	5.53	6.02	4.65	5.08	5.64	6.11	8.14
DOH	days	98.58	94.18	88.27	71.18	72.59	75.65	76.97	70.31	67.13	68.06	68.89	65.62	65.63	66.01	60.66	78.46	71.82	64.74	59.69	44.86

June 30, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.70
= 98.58

Days of Inventory on Hand (DOH) is a financial ratio that measures the average number of days it takes for a company to sell its inventory. A lower DOH indicates that the company is selling its inventory more quickly, which is generally preferred as it signifies efficient inventory management.

Analyzing Alkermes Plc's DOH over the past few quarters, we can see fluctuations in the ratio. The trend shows that the DOH has been relatively stable around the mid-60s to mid-70s range, except for a few quarters where it peaked above 90 days.

The increasing trend in DOH from the end of 2020 to mid-2022 suggests that Alkermes was taking longer to sell its inventory during that period, possibly indicating inventory management challenges or slower sales. However, there has been a slight decrease in the DOH since mid-2022, which may indicate improvement in inventory turnover efficiency.

It's essential for Alkermes to monitor its DOH closely to ensure efficient management of inventory levels. A higher DOH can tie up working capital in excess inventory and may indicate potential issues such as obsolete stock or weak sales. Conversely, a significantly low DOH could lead to stockouts and lost sales opportunities.

Overall, while Alkermes' DOH has shown some variability, the current trend suggests a relatively stable inventory turnover performance. Continued monitoring and analysis of DOH will be crucial for the company to optimize its inventory management and improve overall operational efficiency.