MP Materials Corp (MP)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 0.64 | 1.02 | 1.13 | 1.23 | 1.35 | 1.21 | 1.71 | 1.76 | 2.09 | 4.57 | 4.05 | 3.64 | 3.49 | ||||
| DOH | days | 570.37 | 358.31 | 322.34 | 295.64 | 270.52 | 300.70 | 213.32 | 207.56 | 174.78 | 79.83 | 90.23 | 100.21 | 104.68 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 0.64
= 570.37
Based on the data provided, MP Materials Corporation's Days of Inventory on Hand (DOH) have varied over the past eight quarters. The DOH ranged from 177.46 days in Q1 2022 to 374.72 days in Q4 2023, indicating fluctuations in the company's inventory management efficiency.
A higher DOH implies that MP Materials is holding onto inventory for a longer period before selling it, which could tie up resources and increase carrying costs. Conversely, a lower DOH suggests efficient inventory turnover and better liquidity.
The trend shows an increase in DOH from Q1 2022 to Q4 2023, indicating a potential buildup of inventory relative to sales. This may be a cause for concern as it could lead to inventory obsolescence or write-offs.
It is essential for MP Materials to closely monitor its inventory levels, adjust purchasing and production schedules accordingly, and strive for a balance between maintaining sufficient inventory levels to meet demand and avoiding excess inventory accumulation.
Peer comparison
Dec 31, 2023