Now Inc (DNOW)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 4.93 | 4.34 | 5.17 | 6.33 | 5.43 | |
| DOH | days | 73.97 | 84.13 | 70.63 | 57.68 | 67.22 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.93
= 73.97
The Days of Inventory on Hand (DOH) for NOW Inc have shown some variability over the past five years. In 2023, the company held inventory for an average of 74.80 days, which was a decrease compared to 2022 when it was 85.32 days. This decline suggests an improvement in inventory management efficiency as the company took fewer days to sell its inventory in 2023.
Comparing the most recent data to 2021, where the DOH was 71.57 days, there was a slight increase in 2023, indicating a potential buildup of inventory. However, the DOH in 2023 is still higher than in 2021, signifying that NOW Inc may be slightly less efficient in managing its inventory compared to two years ago.
When looking at the trend over the past five years, it is worth noting that the DOH has fluctuated around a relatively stable range, with the highest being in 2022 and the lowest in 2021. This suggests that NOW Inc has been able to maintain a moderate level of inventory management consistency despite some fluctuations.
Overall, a lower DOH is generally favorable as it indicates that the company is selling its inventory more quickly. However, it is essential for NOW Inc to strike a balance between having enough inventory to meet demand and avoiding excessive stockpiling, which could tie up capital and lead to potential obsolescence.
Peer comparison
Dec 31, 2023