Diamondback Energy Inc (FANG)

Days of inventory on hand (DOH)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover		25.05	28.22	62.38	52.98	44.40	36.23	47.23	43.77	43.43	37.47	33.42	33.92	30.77	44.62	65.45	38.73	65.73	71.58	72.50	69.81
DOH	days	14.57	12.93	5.85	6.89	8.22	10.07	7.73	8.34	8.40	9.74	10.92	10.76	11.86	8.18	5.58	9.42	5.55	5.10	5.03	5.23

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 25.05
= 14.57

Diamondback Energy Inc's days of inventory on hand (DOH) shows the average number of days the company holds inventory before selling it. Looking at the trend over the provided periods, we observe some fluctuations in DOH.

The DOH ranged from around 5 to 6 days in the earlier periods (March 2020-June 2021), indicating efficient management of inventory. However, starting from March 2021, the DOH started to increase, hitting a high of 14.57 days by December 2024.

The increasing trend in DOH from March 2021 suggests that Diamondback Energy Inc may be experiencing challenges in managing its inventory efficiently. Higher inventory holding periods can tie up cash and result in increased carrying costs.

Although some fluctuations were observed in subsequent periods, it is important for the company to closely monitor and manage its inventory levels effectively to optimize working capital and improve overall operational efficiency. A detailed analysis of the reasons behind the fluctuations in DOH would be necessary to implement appropriate strategies for inventory management.