Badger Meter Inc (BMI)

Days of inventory on hand (DOH) is a crucial metric that indicates the average number of days it takes for a company to sell its inventory. This ratio reflects the efficiency of inventory management and directly impacts a company's cash flow and profitability.

Analyzing the trend in Badger Meter Inc's DOH over the past five years shows a fluctuating pattern. From 115.74 days as of December 31, 2020, the DOH increased to 121.31 days by the end of 2021, indicating a potential slowdown in inventory turnover. This trend continued as the DOH further rose to 126.58 days in 2022 and 131.31 days in 2023, suggesting an extended period of inventory turnover.

However, there was a notable improvement by the end of 2024 when the DOH decreased to 105.24 days. This decline indicates a more efficient management of inventory, possibly resulting from better demand forecasting, production planning, or inventory control measures implemented by the company.

Overall, the rising trend in DOH from 2020 to 2023 may suggest potential inefficiencies in inventory management that could tie up working capital and lead to higher carrying costs. The subsequent improvement in 2024 is a positive sign of a potential turnaround in inventory management practices at Badger Meter Inc. Careful monitoring and continuous optimization of inventory levels will be essential for the company to maintain a healthy balance between sales demand and inventory holdings in the future.

Peer comparison

Dec 31, 2024