National Presto Industries Inc (NPK)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 1.44 | 1.75 | 2.03 | 1.98 | 1.84 | |
| DOH | days | 254.16 | 208.37 | 180.21 | 184.73 | 198.30 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.44
= 254.16
The days of inventory on hand (DOH) for National Presto Industries Inc has shown an increasing trend over the past five years, with the ratio increasing from 198.30 days in 2019 to 254.16 days in 2023. This signifies that the company is taking longer to sell its inventory, which may indicate inefficiencies in inventory management or slowing demand for its products.
A higher DOH could tie up more capital in inventory, leading to higher carrying costs and potentially lower profitability if products become obsolete or lose value over time. It may also point to potential issues in production planning, procurement, or sales forecasting that could be impacting the company's operations and financial performance.
Management should closely monitor and address the increasing DOH to optimize inventory levels, improve cash flow, and enhance overall operational efficiency. By implementing strategies to streamline inventory management, such as better demand forecasting, inventory control, and production scheduling, National Presto Industries Inc could potentially reduce its DOH and improve its overall financial health in the future.
Peer comparison
Dec 31, 2023