International Paper (IP)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 8.06 | 5.89 | 6.25 | 6.34 | 6.38 | 6.27 | 6.60 | 7.42 | 7.17 | 6.36 | 6.96 | 6.56 | 7.38 | 6.19 | 6.29 | 6.59 | 4.28 | 4.30 | 2.55 | 2.68 | |
| DOH | days | 45.31 | 61.93 | 58.42 | 57.58 | 57.22 | 58.22 | 55.29 | 49.18 | 50.88 | 57.38 | 52.48 | 55.68 | 49.48 | 58.94 | 58.02 | 55.38 | 85.34 | 84.88 | 143.12 | 136.21 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 8.06
= 45.31
Days of Inventory on Hand (DOH) is a crucial financial ratio that measures how efficiently a company manages its inventory. A higher DOH indicates that a company is holding onto its inventory for a longer period before selling it, which could tie up capital and increase storage costs. On the other hand, a lower DOH implies that a company is selling its inventory quickly, which can improve cash flow and reduce the risk of obsolete inventory.
Based on the data provided for International Paper Co., we observe some fluctuations in the DOH over the past eight quarters. In the most recent quarter, Q4 2023, the DOH was 50.59 days, slightly higher than the previous quarter at 50.24 days. This suggests that International Paper Co. held its inventory for a slightly longer period in Q4 2023.
Comparing the current DOH to the same quarter of the previous year, we see a general increasing trend in inventory holding periods. Despite the variations, the company's DOH has mostly remained above 46 days, indicating that International Paper Co. tends to hold its inventory for around 46 to 53 days before selling it.
Investors and stakeholders should monitor International Paper Co.'s DOH closely to assess the efficiency of its inventory management. A rising trend in DOH may require further investigation to understand the reasons behind the increase and assess its impact on the company's financial performance and operational efficiency.
Peer comparison
Dec 31, 2023