Lear Corporation (LEA)

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		12.74	12.28	12.60	12.31	12.92	12.51	11.86	11.42	11.89	7.83	6.05	5.33	5.03	9.31	13.09	13.79	15.01	14.49	15.12	15.97
DOH	days	28.64	29.71	28.97	29.65	28.25	29.17	30.79	31.97	30.70	46.60	60.32	68.48	72.60	39.20	27.89	26.47	24.32	25.19	24.14	22.86

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 12.74
= 28.64

Days of Inventory on Hand (DOH) is a key financial ratio that measures how efficiently a company manages its inventory. It indicates the number of days it takes for a company to sell its inventory, with a lower number suggesting faster turnover and better inventory management.

Analyzing Lear Corp.'s DOH over the past eight quarters, we observe a fluctuating trend. In Q4 2023, the DOH was 29.49 days, slightly lower compared to the previous quarter. This suggests that the company managed to decrease the number of days it takes to sell its inventory. However, compared to Q4 2022, the DOH has remained relatively consistent.

Looking back over the past year, the DOH has generally been within the range of 29 to 33 days, with occasional fluctuations. The highest DOH was observed in Q1 and Q2 of 2022, indicating slower inventory turnover during that period. It is worth noting that a higher DOH can tie up capital in inventory and potentially lead to increased storage and carrying costs.

Overall, Lear Corp.'s DOH indicates reasonable inventory management, but the company should continue to monitor and potentially optimize its inventory levels to improve efficiency and liquidity.