Mercer International Inc (MERC)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 5.28 | 4.23 | 4.12 | 5.04 | 5.69 | |
| DOH | days | 69.14 | 86.21 | 88.64 | 72.45 | 64.19 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 5.28
= 69.14
The days of inventory on hand (DOH) for Mercer International Inc. have exhibited fluctuations over the past five years. In 2023, the company had 81.56 days of inventory on hand, a decrease from 100.34 days in 2022. This reduction suggests that Mercer has been able to manage its inventory more efficiently during the year, possibly through improved inventory management practices or better demand forecasting.
Comparing the latest DOH to previous years, we can see a downward trend from 2021 (104.53 days) to 2019 (74.23 days), indicating a general improvement in inventory turnover and management effectiveness over time. A lower DOH implies that the company is selling inventory more quickly and may have lower carrying costs and reduced risk of obsolescence.
However, it is important to note that inventory levels can fluctuate based on various factors such as seasonality, changes in demand, and supply chain disruptions. Therefore, while a lower DOH generally indicates efficient inventory management, it is essential for Mercer International Inc. to continue monitoring and optimizing its inventory levels to strike a balance between meeting customer demand and minimizing holding costs.