LKQ Corporation (LKQ)
Days of inventory on hand (DOH)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 2.72 | 2.66 | 2.75 | 2.97 | 2.91 | |
| DOH | days | 134.41 | 137.40 | 132.67 | 122.69 | 125.27 |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.72
= 134.41
Based on the provided data, LKQ Corporation's days of inventory on hand (DOH) have been varying over the past five years.
At the end of 2020, the company had 125.27 days of inventory on hand, which decreased slightly to 122.69 days by the end of 2021. However, the trend reversed in the following years, with the DOH increasing to 132.67 days by the end of 2022, 137.40 days by the end of 2023, and then decreasing to 134.41 days by the end of 2024.
The increasing trend in DOH from 2021 to 2023 may indicate that LKQ Corporation was possibly carrying more inventory levels relative to its sales during this period, which can tie up capital and increase carrying costs. The subsequent decrease in DOH in 2024 may suggest that the company effectively managed its inventory levels or experienced changes in sales patterns or operational efficiencies that allowed for a reduction in inventory on hand.
It is essential for LKQ Corporation to further analyze the reasons behind these fluctuations in DOH to ensure optimal inventory management, balance liquidity, and profitability. A detailed review of inventory turnover ratios, demand forecasting models, and supply chain efficiency could provide insights to help streamline inventory management practices and enhance overall operational performance.