Otter Tail Corporation (OTTR)

Days of inventory on hand (DOH)

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover		3.46	3.14	3.25	3.47	3.73	3.93	3.88	3.72	2.63	2.28	1.24	0.06	0.06	0.07	0.06	0.07	0.06	0.15	0.14	0.13
DOH	days	105.39	116.14	112.24	105.14	97.93	92.98	94.07	98.15	138.85	160.27	294.00	5,817.47	6,528.28	5,580.38	5,843.78	5,324.04	6,034.06	2,487.12	2,684.19	2,840.69

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.46
= 105.39

The days of inventory on hand (DOH) for Otter Tail Corporation has been showing an increasing trend over the past eight quarters. In Q4 2023, the company had an average of 92.18 days of inventory on hand before it is sold, which indicates a rise compared to 86.27 days in the previous quarter (Q3 2023). This growing trend suggests that the company might be carrying excess inventory relative to its sales volume.

Furthermore, comparing the current DOH to the same quarter of the previous year, there is a noticeable increase. For instance, in Q4 2023, the DOH was higher at 92.18 days compared to 75.21 days in Q4 2022. This could signal potential inefficiencies in inventory management or challenges in accurately forecasting demand.

It is important for Otter Tail Corporation to closely monitor its inventory levels to ensure they are in line with sales trends and market demand. Increasing DOH can tie up cash flow and lead to increased storage costs, potentially impacting the company's profitability. Management may need to reassess their inventory management policies and strategies to optimize working capital and improve operational efficiency.