Smith AO Corporation (AOS)
Days of inventory on hand (DOH)
| 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 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 6.29 | 5.93 | 5.99 | 6.13 | 6.02 | 6.03 | 6.49 | 6.37 | 6.57 | 7.85 | 8.11 | 8.14 | 8.23 | 8.01 | 7.90 | 7.92 | 8.39 | 8.30 | 8.00 | 8.25 | |
| DOH | days | 58.06 | 61.57 | 60.95 | 59.55 | 60.65 | 60.51 | 56.28 | 57.34 | 55.55 | 46.52 | 45.03 | 44.86 | 44.35 | 45.54 | 46.20 | 46.07 | 43.48 | 43.95 | 45.64 | 44.24 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 6.29
= 58.06
A.O. Smith Corp.'s days of inventory on hand (DOH) has shown fluctuation over the past eight quarters. The trend indicates that the company has been managing its inventory levels effectively but with some variability. In Q3 2023, the DOH was at 81.05 days, which was higher compared to Q2 2023 at 79.83 days. This suggests that the company may have experienced a slight increase in inventory holding period, possibly indicating slower sales or excess production.
However, it is important to note that the DOH has generally been within a relatively consistent range, with occasional fluctuations. The DOH of around 77-78 days in recent quarters suggests that A.O. Smith Corp. typically holds inventory for about two to three months before selling it. This indicates a reasonable balance between stocking enough inventory to meet demand and avoiding excess holding costs.
Overall, while there may be some fluctuations in inventory management, A.O. Smith Corp. appears to have a relatively stable approach to managing its inventory levels, which is crucial for optimizing working capital and operational efficiency.
Peer comparison
Dec 31, 2023