Rambus Inc (RMBS)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		2.86	5.15	8.30	4.20	5.09
DOH	days	127.60	70.91	43.98	86.92	71.66

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.86
= 127.60

The days of inventory on hand (DOH) is a key financial ratio that measures the average number of days a company holds inventory before it is sold. An increasing trend in DOH may indicate inefficiencies in managing inventory levels or slowing sales, while a decreasing trend suggests improved inventory management or strong sales performance.

Analyzing the DOH for Rambus Inc. over the past five years, we observe fluctuations in inventory holding periods. In 2023, the DOH increased significantly to 146.79 days from 81.46 days in 2022. This substantial rise suggests a strain on the company's inventory management, potentially resulting from excessive inventory levels or a slowdown in sales.

In contrast, the DOH was relatively low in 2021 at 57.17 days, indicating efficient inventory management and a quicker turnover of goods. The notable increase to 121.67 days in 2020 may reflect disruptions in the supply chain or a decrease in demand, leading to excess inventory buildup.

Looking at the DOH for 2019 at 71.66 days, it appears that the company effectively managed its inventory levels and turnover during that period. Overall, Rambus Inc. should monitor its inventory management practices closely to optimize working capital and ensure efficient operations, especially in response to the recent increase in DOH in 2023.