Otis Worldwide Corp (OTIS)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Inventory turnover | 3.31 | 3.08 | 3.38 | 3.29 | |
| DOH | days | 110.42 | 118.65 | 108.01 | 110.90 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.31
= 110.42
The days of inventory on hand (DOH) for Otis Worldwide Corp has fluctuated over the past five years. In 2023, the DOH decreased to 22.30 days from 23.06 days in 2022, indicating a more efficient management of inventory. This reduction suggests that Otis Worldwide Corp is holding inventory for a shorter period before it is sold, which can free up working capital and reduce carrying costs.
Comparing to the data from 2021 and 2020, where the DOH was 22.47 days and 26.79 days respectively, the decrease in 2023 signifies an improvement in inventory turnover efficiency. The DOH in 2023 is closer to the levels seen in 2019, when it was 22.43 days.
Overall, a lower DOH is generally seen as favorable as it indicates that the company is managing its inventory levels effectively. However, it is important to consider industry norms and specific business circumstances when evaluating the significance of changes in days of inventory on hand.
Peer comparison
Dec 31, 2023