Chesapeake Energy Corp (CHK)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		0.21	0.18	8.57	468.11	2.81
DOH	days	1,753.48	2,036.43	42.58	0.78	130.08

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 0.21
= 1,753.48

Over the past five years, Chesapeake Energy Corp's days of inventory on hand (DOH) has shown significant fluctuations. The DOH increased from 130.08 days in 2019 to 1,753.48 days in 2023, indicating a substantial rise in the amount of time it takes for the company to sell off its inventory.

The sharp increase in DOH from 2019 to 2023 could potentially signal inefficiencies in inventory management or an accumulation of excess inventory that is not being sold promptly. This prolonged inventory holding period may result in increased carrying costs, storage expenses, and potential obsolescence risks.

The low DOH figures in 2020 and 2021, at 0.78 days and 42.58 days respectively, suggest that Chesapeake Energy was able to efficiently manage its inventory levels during those years, possibly due to effective demand forecasting or streamlined inventory control processes.

It is important for Chesapeake Energy Corp to closely monitor and optimize its inventory management practices to strike a balance between ensuring product availability for customers and minimizing the costs associated with carrying excess inventory.