Astec Industries Inc (ASTE)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 2.84 | 3.16 | 3.61 | 3.95 | 3.88 | |
| DOH | days | 128.40 | 115.43 | 101.06 | 92.42 | 94.00 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.84
= 128.40
To analyze the trend in Astec Industries Inc.'s days of inventory on hand (DOH) over the past five years, we observe a general increasing pattern. From 2019 to 2020, there was a slight uptick in DOH from 115.57 days to 116.21 days. This increase accelerated in the following years, with DOH reaching 130.80 days in 2021, 142.11 days in 2022, and 165.07 days in 2023.
The upward trend in DOH indicates that, on average, Astec Industries Inc. has been holding its inventory for a longer period before selling it. This may be a concern as higher inventory holding periods can tie up cash and result in increased carrying costs. It may also suggest potential inefficiencies in inventory management, such as overstocking or slow-moving inventory.
Further investigation into the reasons behind the increasing DOH trend is recommended to determine if there are underlying operational issues affecting inventory turnover and efficiency. Analysis of Astec Industries Inc.'s inventory management practices, sales patterns, and demand forecasting could provide insights into improving inventory turnover and optimizing working capital utilization.
Peer comparison
Dec 31, 2023