Enerpac Tool Group Corp (EPAC)
Days of inventory on hand (DOH)
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 4.05 | 3.66 | 3.79 | 3.99 | 4.69 | |
| DOH | days | 90.01 | 99.86 | 96.33 | 91.44 | 77.80 |
August 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.05
= 90.01
Certainly! The days of inventory on hand (DOH) ratio measures the average number of days it takes for a company to sell its inventory. A lower DOH value generally indicates that a company is managing its inventory efficiently, while a higher value could suggest overstocking or slow-moving inventory.
Analyzing Enerpac Tool Group Corp's DOH over the past five years, we observe a fluctuating trend. In 2019, the DOH stood at 77.80 days, indicating that the company took approximately 77.80 days to sell its inventory on average. Subsequently, there was a notable increase in the ratio to 91.44 days in 2020, followed by a further increase to 96.33 days in 2021, and 99.86 days in 2022. However, the trend reversed in 2023, with a decrease to 90.01 days.
The increasing trend from 2020 to 2022 implies that Enerpac Tool Group Corp took longer to sell its inventory during these years, potentially indicating challenges in managing inventory levels, slower sales, or obsolescence. The drop in 2023 suggests an improvement in inventory management or a more efficient sales process.
It is essential to delve deeper into the causes of these fluctuations. A higher DOH can tie up working capital and increase storage costs, while a lower DOH may indicate a more agile inventory management approach. Additional information regarding sales trends, demand forecasts, and production levels would provide insights into the factors driving these changes.
Overall, the trend in Enerpac Tool Group Corp's DOH warrants further investigation to understand the underlying operational and market dynamics impacting its inventory management.
Peer comparison
Aug 31, 2023