Lockheed Martin Corporation (LMT)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 18.87 | 18.68 | 19.45 | 16.01 | 14.22 | |
| DOH | days | 19.35 | 19.54 | 18.77 | 22.80 | 25.68 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 18.87
= 19.35
The days of inventory on hand (DOH) for Lockheed Martin Corp. have shown a fluctuating trend over the past five years. In 2019, the DOH was at its highest, at 25.68 days, indicating that the company held inventory for approximately 25.68 days before selling it. Subsequently, there was a downward trend in 2020 and 2021, with DOH decreasing to 22.81 days and 18.78 days, respectively. This suggested that the company was able to manage its inventory more efficiently during these periods.
However, in 2022 and 2023, there was a slight increase in DOH to 19.57 days and 19.38 days, indicating a potential increase in the time taken to sell inventory. A higher DOH can tie up capital in inventory and suggests that the company may be facing challenges in managing its inventory levels effectively.
It is important for Lockheed Martin Corp. to closely monitor its inventory management practices to ensure that the DOH remains at an optimal level, balancing the costs of holding excess inventory against the risk of stockouts. Additionally, a thorough analysis of the underlying reasons for the fluctuations in DOH could provide valuable insights for the company's operational efficiency and working capital management.
See also:
Lockheed Martin Corporation Average Inventory Processing Period