Masimo Corporation (MASI)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		4.67	3.15	3.26	2.14	1.86
DOH	days	78.12	115.75	111.89	170.66	196.69

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.67
= 78.12

Masimo Corporation's days of inventory on hand (DOH) have shown a declining trend over the years from 196.69 days as of December 31, 2020, to 78.12 days as of December 31, 2024. This indicates a significant improvement in inventory management efficiency. A lower DOH suggests that the company is selling its inventory at a faster rate, which can lead to lower holding costs and potential for increased cash flows.

The decrease in DOH from 2020 to 2024 could be attributed to various factors such as better inventory management practices, improved demand forecasting, streamlining of production processes, or more effective inventory turnover. The downward trend in DOH reflects positively on Masimo Corporation's operational efficiency and ability to align its inventory levels with market demand.

However, it is essential for the company to strike a balance in maintaining optimal inventory levels to meet customer demand while minimizing holding costs. Continuous monitoring and analysis of inventory turnover ratios will be crucial for Masimo Corporation to sustain its improved inventory management performance and support its overall financial health and performance in the future.