KAR Auction Services Inc (KAR)

Days of inventory on hand (DOH)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Inventory turnover		—	—	—	—	—	20.69	28.52	26.33	16.04	33.06	—	0.57	50.38	24.85	24.51	23.25	21.34	24.76	28.71	14.14
DOH	days	—	—	—	—	—	17.64	12.80	13.86	22.75	11.04	—	644.74	7.24	14.69	14.89	15.70	17.10	14.74	12.71	25.81

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ —
= —

The days of inventory on hand (DOH) ratio for KAR Auction Services Inc reflects the number of days it takes for the company to sell its inventory. A lower DOH is generally favorable as it indicates quicker turnover of inventory.

Analyzing the trend over the quarters, we observe that DOH was relatively stable in the first few quarters of the data, ranging between 12 to 25 days. However, there was a significant anomaly in the DOH figure for March 31, 2022, which soared to an unexpected 644.74 days. This outlier may be due to an irregularity in inventory management or reporting.

Following this outlier, the DOH ratio decreased substantially in the subsequent quarters, returning to a more reasonable level of around 10 to 20 days. The company seemed to have addressed the issue reflected in the anomalous spike, leading to improved inventory turnover efficiency.

It is important for investors and stakeholders to scrutinize the reasons behind such aberrations in the DOH metric and monitor the trend over time to ensure that inventory management practices remain efficient and sustainable.