Rockwell Automation Inc (ROK)
Days of inventory on hand (DOH)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 5.44 | 6.21 | 7.33 | 9.01 | 9.31 | |
| DOH | days | 67.08 | 58.80 | 49.82 | 40.49 | 39.21 |
September 30, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 5.44
= 67.08
The days of inventory on hand (DOH) ratio measures the average number of days it takes for a company to sell its inventory. A higher DOH indicates that the company is taking longer to sell its inventory, potentially signaling inefficiency or slow demand.
Rockwell Automation Inc's DOH has shown an increasing trend over the past five years, rising from 55.37 days in 2019 to 96.01 days in 2023. This indicates that the company is taking longer to sell its inventory, which may be a concern for potential obsolescence or holding excess inventory.
The increasing DOH suggests the need for the company to closely monitor and manage its inventory levels, as higher inventory holding periods can tie up working capital and increase holding costs. It may also point towards potential challenges in accurately forecasting demand and managing production levels.
In conclusion, the rising trend in Rockwell Automation Inc's days of inventory on hand over the past five years warrants attention, as it could indicate inefficiencies in inventory management and potential risks associated with excess inventory.
Peer comparison
Sep 30, 2023