3D Systems Corporation (DDD)

Days of inventory on hand (DOH)

		Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Inventory turnover		4.43	6.63	5.78	5.92	5.23
DOH	days	82.37	55.05	63.19	61.68	69.75

December 31, 2022 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.43
= 82.37

The days of inventory on hand (DOH) ratio is a measure of how efficiently a company manages its inventory. It indicates the number of days a company takes to sell its average inventory. A lower DOH is generally favorable as it suggests that inventory is being sold more quickly.

Analyzing the DOH of 3D Systems Corp. over the past five years, we observe the following trends:

1. Dec 31, 2022:
DOH = 155.37 days

2. Dec 31, 2021:
DOH = 96.36 days

3. Dec 31, 2020:
DOH = 127.55 days

4. Dec 31, 2019:
DOH = 115.52 days

5. Dec 31, 2018:
DOH = 133.80 days

The trend reveals a fluctuation in the days of inventory on hand over the period. Notably, there was a significant increase in DOH from 2021 to 2022, going from 96.36 days to 155.37 days, a substantial rise of 59.01 days. This increase in DOH could indicate that 3D Systems Corp. is taking longer to sell its inventory, which may be a cause for concern as it ties up working capital in unsold inventory.

Comparing the current DOH to previous years, it is evident that the 2022 DOH represents the highest value in the past five years, signifying a deterioration in inventory turnover efficiency. This trend is particularly troubling from an operational and liquidity standpoint, as a higher DOH could imply a reduced ability to quickly convert inventory into cash.

Overall, 3D Systems Corp. should focus on inventory management strategies to bring down the DOH to ensure optimal utilization of working capital and enhance operational efficiency. It is essential for the company to closely monitor and control its inventory levels to ensure that excess inventory does not tie up valuable resources.