Powell Industries Inc (POWL)
Days of inventory on hand (DOH)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 9.87 | 10.28 | 15.52 | 17.02 | 17.13 | |
| DOH | days | 36.97 | 35.50 | 23.52 | 21.44 | 21.30 |
September 30, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 9.87
= 36.97
The days of inventory on hand (DOH) measures the average number of days it takes for a company to sell its inventory. A higher DOH value may indicate slower inventory turnover and potential obsolescence or overstocking, while a lower value may suggest efficient inventory management.
In the case of Powell Industries, Inc., the trend in the DOH over the past five years shows a fluctuating pattern. The DOH increased from 24.78 days in 2019 to 27.53 days in 2021, suggesting a slowdown in inventory turnover. However, there was a notable jump to 41.11 days in 2022 and a further increase to 42.25 days in 2023, indicating a significant decline in inventory efficiency.
This increase in DOH could imply various factors such as declining demand, overstocking, or production inefficiencies. It would be important for stakeholders to assess the underlying reasons behind the rising DOH and evaluate the potential impact on the company's working capital and operational performance.
Further analysis and monitoring of Powell Industries' inventory management practices and market conditions are warranted to understand the implications of the increasing DOH and its potential influence on the company's overall financial health.
Peer comparison
Sep 30, 2023