Lindsay Corporation (LNN)

The Days of Inventory on Hand (DOH) measures the average number of days a company holds its inventory before it is sold. It is an important indicator of a company's efficiency in managing its inventory and can provide insights into its inventory turnover and liquidity.

Looking at the trend of Lindsay Corporation's DOH over the past five years, we can observe fluctuations in the number of days it takes for the company to sell its inventory.

In 2019, the DOH was relatively low at 102.24 days, indicating that the company was able to sell its inventory quickly. However, over the next two years, the DOH increased, reaching 127.00 days in 2021. This suggests that the company was holding more inventory for a longer period, which could impact its liquidity and tie up capital.

In 2022 and 2023, the DOH decreased slightly to 123.74 days and 123.44 days, respectively. While this reduction indicates some improvement in inventory turnover, the DOH still remains high compared to 2019.

A high DOH can potentially signal excess or slow-moving inventory, leading to increased storage costs and the risk of obsolescence. It can also point to inefficiencies in the company's supply chain or production processes.

As an analyst, it would be important to further investigate the factors contributing to the fluctuation in Lindsay Corporation's DOH, such as changes in sales patterns, inventory management strategies, or shifts in customer demand. Additionally, comparing the company's DOH to industry benchmarks and its peers' performance can provide valuable context for evaluating its inventory management efficiency.

Ultimately, a sustained reduction in DOH over time would be indicative of improved inventory management and working capital efficiency, positively impacting the company's overall financial performance and competitiveness.

Peer comparison

Aug 31, 2023