Universal Display (OLED)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 0.77 | 0.70 | 0.86 | 0.93 | 1.18 | |
| DOH | days | 473.98 | 522.89 | 425.85 | 391.10 | 309.69 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 0.77
= 473.98
Universal Display Corp.'s days of inventory on hand (DOH) has shown fluctuating trends over the past five years. The company's DOH increased from 309.69 days in 2019 to 425.85 days in 2021, indicating a significant jump in inventory holding period. However, there was a slight decrease in 2022 to 522.89 days, before another decrease to 473.98 days in 2023.
A high DOH suggests that the company may be holding excess inventory, which ties up working capital and leads to increased carrying costs. It may also indicate potential issues with inventory management, such as overestimating demand or inefficiencies in the supply chain.
Conversely, a low DOH may suggest efficient inventory management, but could also signal stockouts or lead to lost sales if demand exceeds available inventory.
Overall, Universal Display Corp. should aim to strike a balance in its inventory management practices to optimize working capital while ensuring that it meets customer demand effectively. Additional analysis and comparison with industry peers would provide further insights into the effectiveness of the company's inventory management strategies.
Peer comparison
Dec 31, 2023