Caterpillar Inc (CAT)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 2.58 | 2.54 | 2.53 | 2.55 | 3.25 | |
| DOH | days | 141.38 | 143.62 | 144.28 | 143.10 | 112.26 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.58
= 141.38
Days of Inventory on Hand (DOH) is a measure that indicates the average number of days a company holds inventory before it is sold. A lower DOH value is generally preferred as it signifies that the company is efficiently managing its inventory and converting it into sales quickly.
For Caterpillar Inc., we observe the following trend in its DOH over the past five years:
- As of December 31, 2023, the DOH stands at 141.38 days, which shows a slight improvement from the previous year.
- In 2022, Caterpillar had a DOH of 143.62 days, which was slightly higher than in 2021.
- The DOH was 144.28 days in 2021, indicating that the company held inventory for a longer period compared to the previous years.
- Similarly, in 2020 and 2019, the DOH was 143.10 days and 112.26 days, respectively.
Overall, Caterpillar's DOH has been relatively stable over the past five years, with some fluctuations but no significant upward or downward trend. The company appears to have a moderate level of inventory turnover, balancing the need to maintain adequate inventory levels with the goal of minimizing excess inventory.
Investors and analysts closely monitor changes in DOH to assess the efficiency of inventory management. Caterpillar's ability to optimize its inventory levels can impact its working capital requirements and ultimately its profitability. It is essential for the company to continue monitoring its inventory turnover and ensure that it aligns with its sales and production strategies.
Peer comparison
Dec 31, 2023