Polaris Industries Inc (PII)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 4.40 | 3.95 | 4.79 | 5.64 | 5.47 | |
| DOH | days | 83.03 | 92.45 | 76.14 | 64.75 | 66.78 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.40
= 83.03
The Days of Inventory on Hand (DOH) ratio for Polaris Inc has shown some variability over the past five years.
In 2023, the company had an inventory turnover ratio of 94.75 days, indicating that, on average, it took approximately 94.75 days for Polaris to sell its entire inventory. This represents an improvement compared to the previous year, where the DOH was 104.39 days. However, it is worth noting that the DOH in 2023 is still higher than the ratios reported in 2021, 2020, and 2019, suggesting that the company may be carrying more inventory relative to its sales.
The increase in DOH from 2020 to 2021 can be a cause for concern as it may indicate slower inventory turnover, potentially tying up more cash in inventory and leading to higher carrying costs. The decrease in DOH in 2022 followed by a further decrease in 2023 could suggest that Polaris made efforts to manage its inventory more efficiently during those years.
Overall, it would be beneficial for Polaris Inc to continue monitoring and managing its inventory levels effectively to ensure optimal inventory turnover and minimize holding costs.