Packaging Corp of America (PKG)
Days of inventory on hand (DOH)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 5.87 | 6.02 | 6.54 | 6.49 | 6.71 | |
| DOH | days | 62.21 | 60.59 | 55.85 | 56.24 | 54.38 |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 5.87
= 62.21
Packaging Corp of America's days of inventory on hand (DOH) has shown a slight increase over the years, from 54.38 days as of December 31, 2020, to 56.24 days as of December 31, 2021, and further to 55.85 days as of December 31, 2022. However, there was a notable jump to 60.59 days as of December 31, 2023, followed by a continued increase to 62.21 days as of December 31, 2024.
The rising trend in the DOH metric indicates that Packaging Corp of America is taking longer to turn its inventory into sales, possibly due to factors such as slower demand, production inefficiencies, or excess inventory levels. This may signify potential liquidity challenges, increased holding costs, and risks of obsolescence.
As an analyst, it would be advisable to further investigate the reasons behind the prolonged DOH trend and assess the company's inventory management practices to optimize working capital utilization and operational efficiency.
Peer comparison
Dec 31, 2024