PACCAR Inc (PCAR)

Days of inventory on hand (DOH)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Inventory turnover 11.75 0.38 0.38 0.48 0.91
DOH days 31.05 959.69 957.71 762.01 401.65

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 11.75
= 31.05

Based on the data provided, PACCAR Inc's days of inventory on hand (DOH) have exhibited significant fluctuations over the years.

- As of December 31, 2020, the company had an inventory turnover period of 401.65 days, indicating that it took the company slightly over a year to sell its entire inventory.
- By December 31, 2021, the DOH increased substantially to 762.01 days, signifying a significant slowdown in inventory turnover.
- The trend continued in 2022 and 2023 with DOH rising to 957.71 days and 959.69 days respectively, reflecting prolonged periods for inventory to remain on hand.
- However, there was a sharp improvement by December 31, 2024, with the DOH plummeting to just 31.05 days, reflecting a remarkable increase in inventory turnover efficiency.

The fluctuation in PACCAR Inc's days of inventory on hand suggests varying levels of inventory management effectiveness and could be influenced by factors such as production levels, demand fluctuations, and supply chain disruptions. An excessively high DOH can tie up capital and increase carrying costs, while a low DOH may indicate potential stockouts or lost sales. Monitoring and analyzing these fluctuations can provide valuable insights into the company's operational efficiency and supply chain dynamics.