American Water Works (AWK)

Days of inventory on hand (DOH)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Inventory turnover		0.60	0.50	0.47	0.45	0.46	0.36	0.38	0.40	0.42	0.51	5.65	12.79	23.23	25.09	25.25	24.48	26.32	25.20	23.75	23.84
DOH	days	606.37	723.11	779.13	807.21	786.15	1,012.88	970.37	916.95	872.44	722.23	64.64	28.54	15.71	14.55	14.46	14.91	13.87	14.48	15.37	15.31

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 0.60
= 606.37

Based on the provided data, American Water Works' days of inventory on hand (DOH) has shown fluctuating trends over the past few years. The company experienced relatively stable DOH levels ranging between 13.87 days to 15.71 days from December 31, 2020, to December 31, 2021. However, starting from March 31, 2022, the DOH increased significantly to 28.54 days and continued to rise steeply to 970.37 days by June 30, 2023.

This sharp increase in DOH from March 31, 2022, to June 30, 2023, may indicate potential issues with inventory management, such as overstocking or slow-moving inventory. Subsequently, the DOH continued to climb to 1,012.88 days by September 30, 2023, before slightly decreasing to 786.15 days by December 31, 2023.

The trend of the DOH remained relatively high, indicating prolonged inventory holding periods for the company. By December 31, 2024, the DOH decreased to 606.37 days, which could suggest efforts to address the inventory management challenges observed in the previous periods.

Overall, the significant fluctuations and notably high levels of DOH in certain periods highlight the importance for American Water Works to actively monitor and optimize its inventory management practices to improve efficiency and profitability.