Hubbell Inc (HUBB)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		5.30	5.84	5.65	7.12	6.47
DOH	days	68.88	62.51	64.59	51.23	56.37

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 5.30
= 68.88

Days of inventory on hand (DOH) indicates the average number of days for which a company holds inventory before it is sold. A higher DOH can suggest overstocking or slow inventory turnover, while a lower DOH may indicate efficient inventory management or stockouts.

Hubbell Inc.'s DOH has shown an increasing trend over the past five years, from 71.35 days in 2019 to 87.24 days in 2023. This suggests that Hubbell has been holding inventory for a longer period before it is sold. The increase in DOH could be due to various factors, such as slowing sales, overproduction, changes in customer demand, or inefficiencies in inventory management.

A high DOH may tie up working capital in inventory and increase holding costs, affecting the company's profitability and liquidity. Hubbell should closely monitor its inventory levels and aim to strike a balance between meeting customer demand and minimizing excess inventory.

It is recommended that Hubbell assess its inventory management practices, analyze demand patterns, streamline its supply chain processes, and consider implementing inventory optimization techniques to improve its inventory turnover and reduce the number of days inventory is held on hand.