ESAB Corp (ESAB)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 4.48 | 4.14 | 3.90 | 3.84 | 4.10 | ||||
| DOH | days | 81.52 | 88.08 | 93.63 | 95.09 | 89.08 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.48
= 81.52
ESAB Corp's Days of Inventory on Hand (DOH) has exhibited fluctuating trends over the past five quarters. In Q1 2023, the DOH was at its highest level of 95.09 days, which indicates that on average, the company held inventory for nearly three months before it was sold. This may suggest potential inefficiencies in inventory management or challenges in matching inventory levels with sales demand.
Subsequently, there was a slight decrease in DOH to 93.63 days in Q2 2023, followed by a further decline to 88.08 days in Q3 2023. These reductions may signal improvements in inventory turnover efficiency or strategic adjustments in managing inventory levels.
However, in Q4 2023, the DOH increased to 81.52 days, which, while lower than the previous quarters, still indicates a noteworthy duration of holding inventory. It is essential for ESAB Corp to evaluate the reasons behind these fluctuations in inventory turnover to optimize working capital, reduce storage costs, and enhance overall operational efficiency.
Overall, monitoring and analyzing the DOH metric can provide valuable insights into ESAB Corp's inventory management practices and help identify potential areas for improvement in managing inventory levels effectively.
Peer comparison
Dec 31, 2023