Louisiana-Pacific Corporation (LPX)
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 | 5.26 | 5.45 | 5.34 | 5.52 | 6.99 | 6.85 | 7.12 | 5.43 | 7.42 | 5.28 | 5.40 | 5.30 | 6.05 | 7.89 | 7.93 | 6.98 | 7.57 | 7.82 | 6.93 | 6.68 | |
| DOH | days | 69.40 | 66.96 | 68.40 | 66.09 | 52.21 | 53.30 | 51.24 | 67.26 | 49.16 | 69.11 | 67.57 | 68.87 | 60.37 | 46.26 | 46.03 | 52.30 | 48.22 | 46.66 | 52.68 | 54.63 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 5.26
= 69.40
To analyze the days of inventory on hand (DOH) of Louisiana-Pacific Corp., we observe a fluctuating trend in inventory management efficiency over the past eight quarters. The DOH metric measures the average number of days it takes for a company to sell its inventory.
In Q4 2022, the company had a relatively low DOH of 52.08 days, indicating efficient inventory turnover. However, this efficiency declined in subsequent quarters, with DOH increasing to 71.23 days in Q3 2023.
The increase in DOH suggests that Louisiana-Pacific Corp. may be holding onto inventory for a longer period, which could tie up working capital and increase carrying costs. A higher DOH may also indicate potential issues such as overstocking or slowing sales.
It is important for the company to closely monitor its inventory levels and adjust production and procurement strategies accordingly to optimize inventory turnover and maintain healthy liquidity. Additionally, a high DOH could signal a need for effective inventory management practices to improve operational efficiency and profitability in the long term.
Peer comparison
Dec 31, 2023