Hologic Inc (HOLX)
Days of inventory on hand (DOH)
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 2.65 | 3.17 | 2.99 | 3.66 | 3.92 | |
| DOH | days | 137.66 | 115.08 | 122.04 | 99.61 | 93.11 |
September 30, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.65
= 137.66
Hologic Inc's days of inventory on hand (DOH) have exhibited an increasing trend over the past five years. The company's inventory turnover has decreased over this period, indicating that it is taking longer to sell its inventory. In particular, the DOH increased from 93.11 days in 2020 to 137.66 days in 2024. This suggests that, on average, Hologic Inc holds inventory for a longer period before it is sold.
A high DOH may indicate inefficiencies in inventory management, such as overstocking or slow-moving inventory. It could tie up capital in inventory and reduce the company's liquidity. However, a high DOH could also be due to the nature of the company's industry or products, where longer lead times or specialized products require higher inventory levels.
In order to improve efficiency and reduce the DOH, Hologic Inc may need to focus on optimizing its inventory management practices, such as forecasting demand more accurately, reducing obsolete inventory, and improving supply chain processes. Monitoring and actively managing inventory levels can help the company maintain a balance between having enough inventory to meet customer demand and minimizing excess inventory holding costs.
Peer comparison
Sep 30, 2024