Allegion PLC (ALLE)
Days of inventory on hand (DOH)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 4.97 | 4.72 | 4.07 | 4.37 | 5.44 | |
| DOH | days | 73.39 | 77.35 | 89.68 | 83.52 | 67.05 |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.97
= 73.39
Days of Inventory on Hand (DOH) is a key indicator of how efficiently a company manages its inventory. A higher DOH value indicates that the company is taking longer to sell its inventory, which can tie up capital and may signify potential issues with inventory management.
Analyzing the trend in Allegion PLC's DOH over the five-year period shows an increase from 67.05 days as of December 31, 2020, to 73.39 days as of December 31, 2024. This gradual increase suggests a lengthening in the time it takes for Allegion PLC to sell its inventory.
While there was a noticeable uptick in DOH from 2020 to 2022, with a more pronounced increase in 2022, the metric then decreased in 2023 before rising again in 2024. These fluctuations may indicate varying levels of inventory turnover efficiency during these years.
In conclusion, the upward trend in Allegion PLC's DOH implies that the company may need to focus on optimizing its inventory management processes to avoid excess inventory buildup, minimize carrying costs, and improve overall operational efficiency.