Diamondback Energy Inc (FANG)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		8.57	56.21	42.76	41.39	65.73
DOH	days	42.60	6.49	8.54	8.82	5.55

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 8.57
= 42.60

The days of inventory on hand (DOH) ratio for Diamondback Energy Inc has shown variability over the past five years. In December 2020, the company held inventory for an average of 5.55 days before selling it, indicating efficient inventory management. However, by December 2024, the DOH had increased significantly to 42.60 days, suggesting a potential buildup of excess inventory or challenges in selling existing inventory promptly.

The company experienced an upward trend in DOH from 2020 to 2022, reaching 8.82 days in December 2021 and then slightly decreasing to 8.54 days in December 2022. This increase can signify a slowdown in inventory turnover and may lead to increased carrying costs or obsolete inventory risks.

In 2023, the DOH decreased to 6.49 days, indicating a more efficient management of inventory compared to the previous year. However, the sharp increase to 42.60 days in 2024 raises concerns about potential inefficiencies in inventory management that may require attention and optimization to avoid tying up capital in excess inventory levels. Monitoring and addressing factors contributing to this spike in DOH will be crucial for Diamondback Energy Inc to maintain optimal inventory levels and improve overall operational efficiency.