Healthcare Services Group Inc (HCSG)
Days of inventory on hand (DOH)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 88.82 | 78.83 | 70.70 | 54.39 | 47.25 | |
| DOH | days | 4.11 | 4.63 | 5.16 | 6.71 | 7.73 |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 88.82
= 4.11
The days of inventory on hand (DOH) for Healthcare Services Group Inc has shown a decreasing trend over the past five years, indicating an improvement in inventory management efficiency.
As of December 31, 2020, the company had, on average, 7.73 days' worth of inventory on hand, which decreased to 6.71 days by December 31, 2021. This downward trend continued over the subsequent years, with DOH reducing to 5.16 days by December 31, 2022, 4.63 days by December 31, 2023, and further dropping to 4.11 days by December 31, 2024.
The decreasing DOH suggests that Healthcare Services Group Inc is effectively managing its inventory levels, potentially leading to reduced carrying costs, better cash flow management, and a more agile response to changes in demand. This improvement in inventory turnover efficiency may also indicate the company's ability to optimize its supply chain operations and minimize the risk of obsolete or excess inventory.