Balchem Corporation (BCPC)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 5.66 | 5.53 | 6.10 | 6.79 | 5.15 | |
| DOH | days | 64.44 | 65.99 | 59.79 | 53.73 | 70.83 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 5.66
= 64.44
The days of inventory on hand (DOH) ratio for Balchem Corp. has exhibited some fluctuation over the past five years. In 2023, the company reported a DOH of 64.44 days, representing a slight improvement from the previous year's 65.99 days. This suggests that the company held its inventory for approximately 64.44 days before selling it.
Comparing this figure to historical data, we observe that the DOH ratio has generally trended upwards since 2020 when it was 53.73 days, peaking at 70.83 days in 2019. A higher DOH value may indicate that Balchem Corp. is taking longer to sell its inventory, potentially tying up more capital in stock and incurring storage costs.
It is essential for the company to strike a balance between managing inventory levels efficiently to meet customer demand and minimizing carrying costs associated with excess stock. Further analysis, considering industry benchmarks and specific operational factors, would be needed to fully evaluate the implications of Balchem Corp.'s DOH ratio on its overall financial performance and operational effectiveness.
Peer comparison
Dec 31, 2023