American States Water Company (AWR)

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		11.77	10.69	10.11	10.46	9.62	9.92	9.42	9.79	11.01	12.01	12.47	13.82	13.24	16.47	19.20	18.97	19.15	20.17	20.19	21.76
DOH	days	31.01	34.13	36.11	34.91	37.94	36.81	38.74	37.29	33.16	30.38	29.27	26.40	27.57	22.16	19.01	19.24	19.06	18.10	18.08	16.77

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 11.77
= 31.01

American States Water Company's days of inventory on hand (DOH) has exhibited a fluctuating trend over the analyzed period. The DOH increased from 16.77 days as of March 31, 2020, to a peak of 38.74 days as of June 30, 2023, indicating a prolonged holding period for inventory. Subsequently, there was a slight decrease to 31.01 days as of December 31, 2024.

The company's DOH values suggest variations in inventory management efficiency, with higher values indicating a potential risk of excess inventory or slow-moving stock, which could lead to increased holding costs and reduced liquidity. Conversely, lower DOH values might indicate understocking and potential sales disruptions due to inventory shortages.

It is recommended that American States Water Company closely monitors its inventory levels, implements effective inventory management strategies, and aligns its purchasing and production policies to optimize inventory turnover and minimize carrying costs. Maintaining an optimal balance in inventory levels is crucial for ensuring operational efficiency and profitability in the long term.