Graco Inc (GGG)

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 2.45 2.24 2.19 2.21 2.36 2.29 2.25 2.19 2.28 2.31 2.27 2.26 2.49 2.52 2.63 2.65 2.78 2.72 2.59 2.67
DOH days 149.07 162.86 166.99 164.93 154.65 159.05 161.99 166.39 160.24 157.83 160.93 161.56 146.32 144.92 139.05 137.54 131.14 134.04 140.82 136.84

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.45
= 149.07

Days of inventory on hand (DOH) is a crucial metric that indicates how efficiently a company manages its inventory levels. A higher DOH value suggests slower inventory turnover, potentially indicating excessive inventory levels or potential difficulties in selling products quickly.

Analyzing Graco Inc's DOH over the past few quarters, it is observed that there has been a fluctuating trend. The DOH increased from 136.84 days on March 31, 2020, to 166.39 days on March 31, 2023, before slightly decreasing to 149.07 days on December 31, 2024.

The significant increase in DOH from 2020 to 2023 might raise concerns about Graco Inc's inventory management efficiency and liquidity, as it indicates a longer time taken to sell inventory. This could tie up capital in unsold goods and potentially lead to increased carrying costs.

Although there was a slight decrease in DOH in the latest period (December 31, 2024), it is essential for Graco Inc to focus on optimizing its inventory management processes to ensure a healthy balance between carrying enough inventory to meet demand without holding excess stock for extended periods.

Investors and stakeholders will closely monitor Graco Inc's future DOH trends to assess improvements in inventory turnover and operational efficiency as lower DOH values generally indicate better inventory management practices and improved liquidity.