Green Brick Partners Inc (GRBK)
Days of inventory on hand (DOH)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 0.72 | 0.80 | 0.87 | 0.86 | 0.88 | |
| DOH | days | 506.85 | 455.15 | 420.55 | 422.13 | 415.81 |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 0.72
= 506.85
Days of Inventory on Hand (DOH) is a crucial financial ratio that indicates the average number of days a company holds its inventory before it is sold. In the case of Green Brick Partners Inc, the trend in DOH from 2020 to 2024 shows an increasing pattern, with the metric rising from 415.81 days in 2020 to 506.85 days in 2024.
The rise in DOH over the period suggests that Green Brick Partners Inc is taking longer to sell its inventory, indicating a potential inefficiency in managing its inventory levels. A high DOH can tie up capital in unsold inventory, leading to increased storage costs and potential obsolescence risks.
It is essential for Green Brick Partners Inc to monitor and control its inventory levels effectively to optimize its cash flow and improve its overall financial performance. This may involve implementing tighter inventory management practices, such as better forecasting of demand, streamlining supply chain processes, and reducing excess inventory levels.
In conclusion, the increasing trend in Green Brick Partners Inc's Days of Inventory on Hand highlights the importance of efficient inventory management practices to enhance operational efficiency and financial health.
Peer comparison
Dec 31, 2024