International Paper (IP)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 8.06 | 8.50 | 8.66 | 9.91 | 7.79 | |
| DOH | days | 45.31 | 42.96 | 42.13 | 36.81 | 46.88 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 8.06
= 45.31
The days of inventory on hand (DOH) for International Paper Co. have fluctuated over the past five years. In 2023, the company had an average of 50.59 days of inventory on hand, representing an increase from 46.81 days in 2022 and a slight decrease from 47.87 days in 2021. This suggests that the company may be holding more inventory relative to its sales volume in 2023 compared to the previous year.
However, when compared to 2020 and 2019, where the company had 52.06 days and 52.78 days of inventory on hand respectively, the DOH ratio has improved. A decreasing trend in DOH indicates that the company is managing its inventory more efficiently by turning over its inventory faster or holding less inventory.
It is important to note that a lower DOH ratio is generally preferable as it indicates that the company is efficiently managing its inventory, minimizing carrying costs, and potentially reducing the risk of obsolete inventory. Further analysis of the company's operations and inventory management practices would provide additional insights into the significance of the changes in the DOH ratio over the years.
Peer comparison
Dec 31, 2023