Ciena Corp (CIEN)

Days of Inventory on Hand (DOH) is a financial ratio that measures the average number of days it takes for a company to sell its inventory. A lower DOH value indicates a faster turnover of inventory, which is generally seen as a positive indicator of efficiency and liquidity.

Analyzing CIENA Corp.'s DOH over the past five years, we can observe the following trends:

1. Oct 28, 2023: 152.95 days
2. Oct 29, 2022: 166.75 days
3. Oct 30, 2021: 71.95 days
4. Oct 31, 2020: 66.89 days
5. Oct 31, 2019: 62.04 days

The DOH has fluctuated significantly over the past five years, ranging from a low of 62.04 days in 2019 to a high of 166.75 days in 2022. This fluctuation indicates variations in the company's inventory management and sales efficiency.

The significant increase in DOH from 2019 to 2022 may indicate a potential concern as it suggests that the company took longer to sell its inventory, leading to a decrease in inventory turnover. A higher DOH can tie up working capital and indicate potential inefficiencies in managing inventory levels.

Conversely, the decrease in DOH from 2022 to 2023 is a positive sign, indicating a potential improvement in inventory management efficiency. A lower DOH suggests that the company may be selling its inventory more quickly, which can free up working capital and improve liquidity.

To gain a more comprehensive understanding of CIENA Corp.'s inventory management, it would be beneficial to compare the DOH with industry benchmarks and analyze the company's inventory turnover ratio. Additionally, examining management commentary and operational strategies related to inventory management could provide further insights into the company's performance and prospects for improvement.

Peer comparison

Oct 28, 2023