Cognex Corporation (CGNX)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		3.57	4.91	5.22	8.50	7.75
DOH	days	102.12	74.36	69.94	42.92	47.10

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.57
= 102.12

The days of inventory on hand (DOH) for Cognex Corp. has exhibited a fluctuating trend over the past five years. In 2023, the DOH increased significantly to 250.67 days from 157.31 days in 2022, indicating that the company held inventory for a longer period before it was converted into sales. This may suggest inefficiencies in inventory management or a buildup of excess inventory.

Comparing 2023 to 2021, there was a noticeable increase in DOH from 148.89 days to 250.67 days. This rise indicates a prolonged holding period for inventory, potentially tying up cash flow and hindering the company's ability to introduce new products or respond to changes in demand swiftly.

However, when compared to the figures in 2020 and 2019, the DOH in 2021 and 2022 show an overall upward trend, with higher values. This trend signifies a potential deterioration in inventory management efficiency over the years, as the company took more days to sell its inventory.

Overall, the increasing trend in DOH for Cognex Corp. suggests a potential need for the company to streamline its inventory management processes, improve demand forecasting, or revise production schedules to optimize inventory levels and enhance liquidity.