NOV Inc. (NOV)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		3.55	3.14	3.26	3.57	4.02
DOH	days	102.80	116.31	112.10	102.28	90.86

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.55
= 102.80

The days of inventory on hand (DOH) of NOV Inc. have exhibited an upward trend over the past five years, increasing from 90.86 days as of December 31, 2020, to 102.80 days as of December 31, 2024. This indicates that, on average, the company holds its inventory for a longer period before being sold or used in production.

The rise in DOH suggests a potential inefficiency in managing inventory levels, as a higher number of days indicates that inventory turnover is slowing down. This could result in increased carrying costs, storage costs, and the risk of obsolete inventory.

It is essential for NOV Inc. to monitor and optimize its inventory management practices to strike a balance between meeting customer demand and avoiding unnecessary holding costs. By strategically analyzing and adjusting its inventory levels, the company can improve cash flow, reduce carrying costs, and enhance overall operational efficiency.