Power Integrations Inc (POWI)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		1.32	2.10	3.45	2.38	2.29
DOH	days	276.25	173.90	105.74	153.44	159.16

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.32
= 276.25

The days of inventory on hand (DOH) for Power Integrations Inc. have shown fluctuating trends over the past five years. The company's DOH was at 276.25 days as of December 31, 2023, which is significantly higher compared to the previous year's DOH of 173.90 days. This indicates that, on average, the company held inventory for a longer period in 2023.

The increase in DOH from 2022 to 2023 could suggest potential issues such as excess inventory levels, slow-moving inventory, or challenges in managing inventory efficiently. A high DOH value may tie up working capital and increase the risk of obsolescence.

It is essential for Power Integrations Inc. to closely monitor and manage its inventory levels to optimize working capital utilization, reduce carrying costs, and ensure that inventory turnover remains at a healthy level. Analyzing the factors contributing to the increase in DOH can help the company improve its inventory management practices and enhance operational efficiency.