Federal Signal Corporation (FSS)

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	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover		4.19	3.75	3.46	3.54	3.72	3.58	3.82	3.88	4.04	4.19	4.36	4.09	4.53	4.33	4.41	4.50	4.91	4.62	4.88	4.87
DOH	days	87.03	97.29	105.58	103.03	98.02	101.98	95.44	94.06	90.45	87.10	83.70	89.34	80.66	84.30	82.78	81.11	74.30	79.06	74.80	74.94

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.19
= 87.03

Days of Inventory on Hand (DOH) is a key financial ratio that measures the average number of days a company holds its inventory before it is sold. A lower DOH value indicates that the company is managing its inventory efficiently and effectively.

Analyzing the trend of Federal Signal Corp.'s DOH over the past eight quarters, we observe fluctuations in the ratio. In Q4 2023, the DOH stood at 87.03 days, marking a decrease from the previous quarter's 97.29 days. This signifies that the company has improved its inventory management and is selling its goods more quickly compared to the prior quarter.

Looking back at Q1 and Q2 of 2023, we see a gradual increase in DOH from 103.03 days to 105.58 days, suggesting a slowdown in inventory turnover during that period. The ratio then decreased in Q3 and Q4 of 2022, indicating improved efficiency in managing inventory levels.

Comparing the current DOH figures to the same period a year ago, we observe slight variations but generally no significant deviations. It is important for Federal Signal Corp. to closely monitor its DOH and strive to maintain an optimal balance in inventory levels to improve liquidity and operational performance.