Cadence Design Systems Inc (CDNS)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		5.60	7.16	7.07	9.80	12.28
DOH	days	65.14	50.99	51.63	37.25	29.71

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 5.60
= 65.14

The days of inventory on hand (DOH) for Cadence Design Systems, Inc. have shown fluctuations over the past five years. In 2019, the company had 76.47 days of inventory on hand, which increased to 90.75 days in 2021. Subsequently, there was a significant jump to 137.58 days in 2022 before decreasing slightly to 125.72 days in 2022. The most recent data point shows a further increase to 152.41 days in 2023.

The upward trend in DOH from 90.75 days in 2021 to 152.41 days in 2023 may indicate that Cadence Design Systems, Inc. is holding more inventory relative to its sales. This could be a result of overstocking, slower sales, or inefficiencies in inventory management. A high DOH level suggests that the company may face challenges in selling its inventory quickly, potentially leading to higher holding costs and a strain on cash flow.

It is important for Cadence Design Systems, Inc. to closely monitor and manage its inventory levels to ensure optimal utilization of resources, minimize carrying costs, and maintain competitiveness in its industry. Further analysis and comparison with industry benchmarks could provide additional insights into the company's inventory management efficiency.