Packaging Corp of America (PKG)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 6.61 | 7.15 | 7.11 | 7.40 | 7.44 | |
| DOH | days | 55.23 | 51.07 | 51.31 | 49.33 | 49.04 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 6.61
= 55.23
Packaging Corp Of America's Days of Inventory on Hand (DOH) has shown a fluctuating trend over the past five years. The company experienced an increase in its DOH from 54.48 days in 2019 to 56.24 days in 2021 before slightly decreasing to 55.85 days in 2022. However, by the end of 2023, the DOH increased to 60.59 days, showing a notable rise.
A higher DOH indicates that the company is holding onto inventory for a longer period before selling it. This could suggest potential issues such as overproduction, slow sales, or inefficient inventory management. It may tie up capital in unsold goods and lead to increased holding costs.
It would be essential for Packaging Corp Of America to analyze the reasons behind the increasing trend in DOH and take necessary steps to optimize its inventory management processes. This could involve implementing better demand forecasting, improving supply chain efficiency, or adjusting production levels to align with market demand. Monitoring and managing DOH effectively can help the company improve cash flow, reduce holding costs, and enhance overall operational efficiency.
Peer comparison
Dec 31, 2023