National Presto Industries Inc (NPK)
Days of inventory on hand (DOH)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 1.11 | 1.44 | 1.75 | 2.03 | 1.98 | |
| DOH | days | 327.68 | 254.16 | 208.37 | 180.21 | 184.73 |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.11
= 327.68
Based on the data provided, National Presto Industries Inc's days of inventory on hand (DOH) has shown a fluctuating trend over the past five years. The company's DOH was 184.73 days as of December 31, 2020, which decreased slightly to 180.21 days by the end of 2021. However, there was a significant increase in DOH to 208.37 days by the end of 2022, followed by a further increase to 254.16 days by the end of 2023.
The most notable change in DOH occurred in the most recent year, with the metric jumping to 327.68 days as of December 31, 2024, indicating that National Presto Industries Inc is carrying a significantly higher level of inventory relative to its sales volume. A higher DOH may imply slower inventory turnover, which could potentially lead to increased holding costs, obsolete inventory, or inefficiencies in working capital management.
It is essential for the company to assess the reasons behind this substantial increase in DOH and take necessary steps to optimize its inventory management practices to improve efficiency and maintain a balance between ensuring product availability and managing inventory costs effectively. Periodic review and adjustment of inventory policies and practices may be warranted to align inventory levels with demand and operational requirements.
Peer comparison
Dec 31, 2024