Innospec Inc (IOSP)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 5.88 | 4.69 | 4.80 | 5.27 | 5.53 | |
| DOH | days | 62.06 | 77.74 | 76.06 | 69.23 | 66.00 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 5.88
= 62.06
Innospec Inc's days of inventory on hand (DOH) have shown fluctuating trends over the past five years. The company managed to reduce its DOH from 85.26 days in 2019 to 80.68 days in 2023, indicating an improvement in inventory management efficiency during this period. However, it is noteworthy that there was a slight increase in DOH from 2021 to 2022, reaching 98.90 days, before declining again in 2023.
The downward trend in DOH suggests that Innospec has been more effective in managing its inventory levels relative to its sales volume. Lower DOH values typically indicate that the company is turning over its inventory more quickly, which can lead to lower storage costs and less risk of inventory obsolescence.
It is important to continue monitoring Innospec's DOH in the future to ensure that the trend remains downward or stable, as excessive inventory levels can tie up capital and affect profitability. By maintaining an optimal level of inventory to meet demand without excessive holding costs, the company can enhance its overall operational efficiency and financial performance.
Peer comparison
Dec 31, 2023