Sturm Ruger & Company Inc (RGR)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 5.14 | 6.40 | 10.29 | 12.98 | 10.99 | |
| DOH | days | 71.02 | 57.06 | 35.47 | 28.12 | 33.22 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 5.14
= 71.02
The Days of Inventory on Hand (DOH) for Sturm, Ruger & Co., Inc. have shown an increasing trend over the past five years, indicating a potential inefficiency in managing inventory levels. In 2023, the company had an average of 71.02 days of inventory on hand, a noticeable increase from 57.06 days in 2022, 35.47 days in 2021, 28.12 days in 2020, and 33.22 days in 2019.
The rising trend in DOH suggests that Sturm, Ruger & Co., Inc. may be carrying excess inventory relative to its sales levels, which can tie up capital and increase holding costs. This may be a cause for concern as it can lead to potential obsolescence, deterioration, or changes in market demand impacting the company's profitability.
Management should closely monitor and analyze inventory turnover rates, review procurement processes, optimize production scheduling, and explore ways to streamline inventory management practices to improve efficiency and ultimately enhance the company's overall financial performance.
Peer comparison
Dec 31, 2023