Lear Corporation (LEA)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		13.53	12.30	12.38	11.37	11.37
DOH	days	26.97	29.67	29.48	32.10	32.09

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 13.53
= 26.97

Days of Inventory on Hand (DOH) is a crucial ratio that measures the number of days a company holds inventory before it is sold. Looking at Lear Corporation's trend in DOH from 2020 to 2024, there has been a gradual decrease in the number of days it takes to sell its inventory.

In 2020, Lear Corporation held inventory for 32.09 days, which decreased slightly to 32.10 days in 2021. However, there was a more noticeable drop in DOH to 29.48 days in 2022 and a slight increase to 29.67 days in 2023. Notably, in 2024, the DOH decreased significantly to 26.97 days, indicating that Lear Corporation has become more efficient in managing its inventory turnover.

A lower DOH suggests that Lear Corporation has been able to optimize its inventory management processes, leading to faster turnover and potentially lower carrying costs. This trend may indicate improved efficiencies in production, sales, and supply chain management, which can positively impact the company's overall financial performance and profitability.