Raytheon Technologies Corp (RTX)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 0.53 | 0.50 | 0.50 | 0.50 | 0.54 | 0.56 | 0.58 | 0.61 | 0.64 | 1.97 | 3.16 | 4.30 | 5.11 | 4.36 | 3.75 | 3.02 | 3.82 | 3.49 | 3.96 | 4.50 | |
| DOH | days | 695.12 | 723.16 | 729.94 | 723.04 | 676.18 | 646.93 | 632.68 | 596.04 | 571.47 | 185.48 | 115.50 | 84.86 | 71.48 | 83.73 | 97.46 | 120.85 | 95.44 | 104.60 | 92.26 | 81.13 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 0.53
= 695.12
Days of Inventory on Hand (DOH) is a key financial ratio used to evaluate how efficiently a company is managing its inventory. In the case of RTX Corp, we observe fluctuations in the DOH ratio over the past 8 quarters.
Starting with Q1 2022, the DOH was at 68.54 days, indicating the company held inventory for approximately 69 days. Subsequently, there was a gradual increase in the DOH ratio over the next few quarters, peaking at 79.33 days in Q3 2023. This suggests that RTX Corp was holding inventory for a longer period, which may tie up capital and increase holding costs.
It is important to note that a high DOH ratio could be a potential indicator of excess inventory, slow-moving products, or inefficiencies in inventory management. Conversely, a low DOH ratio could imply stockouts and potential lost sales opportunities.
It is recommended for RTX Corp to closely monitor and manage its inventory levels to strike a balance between ensuring product availability and minimizing holding costs. Regularly evaluating and adjusting inventory levels based on demand forecasts and market trends can help optimize the DOH ratio and improve overall efficiency in inventory management.
Peer comparison
Dec 31, 2023
See also:
Raytheon Technologies Corp Average Inventory Processing Period (Quarterly Data)