IPG Photonics Corporation (IPGP)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		1.64	1.72	1.66	1.81	1.86
DOH	days	222.15	212.69	219.99	201.33	196.21

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.64
= 222.15

The days of inventory on hand (DOH) for IPG Photonics Corp has exhibited a slight increase over the past five years, with the metric rising from 196.21 days as of December 31, 2019, to 222.15 days as of December 31, 2023. This indicates that, on average, the company took approximately 222 days to sell its inventory at the end of the most recent fiscal year.

A higher DOH value suggests that the company may be holding onto excess inventory, leading to potential risks such as inventory obsolescence, storage costs, and tying up capital that could be invested elsewhere. However, it could also indicate that the company operates in a niche market with specialized products that have longer sales cycles.

The consistent increase in DOH over the years may prompt further investigation into IPG Photonics Corp's inventory management practices. It would be beneficial for the company to reassess its inventory levels, streamline its production processes, and actively manage its supply chain to optimize inventory turnover and reduce carrying costs.