MGP Ingredients Inc (MGPI)
Days of inventory on hand (DOH)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 1.14 | 1.53 | 1.83 | 1.74 | 2.10 | |
| DOH | days | 319.20 | 238.06 | 199.88 | 209.86 | 173.46 |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.14
= 319.20
The days of inventory on hand (DOH) for MGP Ingredients Inc have shown a fluctuating trend over the past five years. Starting at 173.46 days on December 31, 2020, the DOH increased to 209.86 days by December 31, 2021, indicating a longer period for the company to convert its inventory into sales. Subsequently, there was a slight decrease in DOH to 199.88 days by December 31, 2022. However, the trend reversed in the following years, with the DOH increasing significantly to 238.06 days on December 31, 2023, and further escalating to 319.20 days by December 31, 2024.
The rising trend in DOH suggests that MGP Ingredients Inc may be experiencing challenges in efficiently managing its inventory levels or facing difficulties in selling its products promptly. A high DOH value can tie up capital in inventory and increase carrying costs, potentially impacting the company's profitability and liquidity. It may be essential for the company to assess its inventory management practices to optimize operations and improve overall efficiency.