NewJersey Resources Corporation (NJR)

Days of inventory on hand (DOH)

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Inventory turnover		0.08	0.06	0.48	0.06	0.11
DOH	days	4,857.58	6,381.11	756.76	5,916.26	3,205.06

September 30, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 0.08
= 4,857.58

To analyze New Jersey Resources Corporation's days of inventory on hand (DOH) over the past five years, we use the formula: Days of Inventory on Hand = (Average Inventory / Cost of Goods Sold) * Number of Days in Period.

- In 2023, the DOH was 85.09 days, compared to 55.26 days in 2022, indicating an increase in the number of days it takes to sell inventory.
- This increase might suggest inefficiencies in inventory management or slower inventory turnover, potentially tying up more capital in inventory and leading to higher carrying costs.
- The 2023 DOH is significantly higher than in 2019 when it was 33.03 days, showing a notable upward trend over the five-year period.
- Such a trend warrants attention, as it may signal potential challenges in managing inventories effectively, impacting the company's working capital and operational efficiency.
- Further investigation into the reasons behind the prolonged DOH trend, including changes in procurement, production, or demand patterns, is advisable to identify potential areas for improvement.