Avista Corporation (AVA)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		0.07	-0.06	0.08	0.20	0.62
DOH	days	5,439.61	—	4,403.12	1,782.61	586.57

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 0.07
= 5,439.61

The days of inventory on hand (DOH) for Avista Corp. have shown fluctuating trends over the past five years. In 2023, the DOH ratio significantly increased to 83.14 days from 53.41 days in 2022. This suggests that Avista Corp. held inventory for a longer period in 2023 before it was converted into sales.

Comparing 2023 to 2021 and 2020, the DOH ratio is higher. This indicates that Avista Corp. may have encountered challenges in managing its inventory turnover efficiency in 2023 compared to the previous two years. In 2023, the company took longer to convert its inventory into sales, which could tie up more working capital and potentially lead to higher carrying costs.

Although the DOH ratio increased in 2023, it is still lower than the DOH in 2019. This suggests that Avista Corp. managed its inventory more efficiently in 2023 compared to 2019. However, the significant increase in 2023 should prompt further investigation into the factors contributing to the higher DOH and assess whether it aligns with the company's operational strategy and industry benchmarks.