Green Plains Renewable Energy Inc (GPRE)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		18.27	16.24	13.43	7.90	12.06
DOH	days	19.98	22.48	27.19	46.19	30.27

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 18.27
= 19.98

The days of inventory on hand (DOH) for Green Plains Inc has shown a decreasing trend over the past five years. In particular, the DOH has decreased from 38.72 days at the end of 2019 to 25.38 days at the end of 2023. This improvement indicates that the company has been managing its inventory more efficiently, holding less inventory for a shorter period before sale.

A lower DOH value typically signifies better inventory management and faster inventory turnover, which can lead to reduced carrying costs and lower risk of inventory obsolescence. The decreasing trend in DOH for Green Plains Inc suggests potential improvements in its supply chain management, production processes, demand forecasting, and overall operational efficiency.

However, it is essential to note that a significantly low DOH value could also indicate stockouts or inventory shortages, which may impact the company's ability to fulfill customer orders promptly. Therefore, while the decreasing trend in DOH is generally positive, it is crucial for Green Plains Inc to strike a balance between minimizing inventory holding costs and ensuring adequate inventory levels to meet customer demand effectively.