Alpha Metallurgical Resources Inc (AMR)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 10.69 | 13.11 | 14.68 | 15.49 | 14.59 | |
| DOH | days | 34.13 | 27.84 | 24.87 | 23.56 | 25.02 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 10.69
= 34.13
To analyze Alpha Metallurgical Resources Inc's days of inventory on hand (DOH) over the past four years, we observe an increasing trend in the DOH ratio. In 2020, the company held inventory for an average of 30.79 days, which increased to 28.11 days in 2021, 32.03 days in 2022, and further climbed to 35.84 days in 2023.
The rising trend in DOH indicates that inventory turnover has been slowing down over the years. This may imply inefficiencies in inventory management, leading to longer periods of inventory sitting idle before being sold or used in production.
A high DOH ratio can tie up capital in inventory, potentially leading to increased holding costs and risk of obsolescence. It also suggests that the company may be carrying excess inventory levels relative to its sales demand, impacting cash flows and profitability.
Alpha Metallurgical Resources Inc should closely monitor its inventory levels and implement strategies to improve inventory turnover, such as optimizing procurement processes, managing production schedules efficiently, and enhancing demand forecasting accuracy to align inventory levels with actual sales demand.
Peer comparison
Dec 31, 2023