Cummins Inc (CMI)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 4.55 | 3.81 | 4.21 | 4.36 | 5.05 | |
| DOH | days | 80.26 | 95.77 | 86.74 | 83.81 | 72.33 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.55
= 80.26
Cummins Inc.'s Days of Inventory on Hand (DOH) has fluctuated over the past five years. The downward trend in DOH from 2019 to 2021 indicated a more efficient management of inventory levels, with the company holding inventory for fewer days. However, in 2022 and 2023, the DOH increased, suggesting a potential buildup of inventory relative to sales.
The average DOH over these five years is approximately 83 days, with a high of 95.77 days in 2022 and a low of 72.33 days in 2019. The rise in inventory days in 2022 and 2023 may warrant further investigation into the company's inventory management practices to ensure optimal efficiency and cost control. It's important to monitor inventory turnover rates and assess the reasons behind the increase in DOH to make informed decisions regarding inventory levels and operations.
Peer comparison
Dec 31, 2023