Stepan Company (SCL)
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 | 8.28 | 8.04 | 7.10 | 6.86 | 6.25 | 6.25 | 7.00 | 7.28 | 6.90 | 6.77 | 6.85 | 7.21 | 7.46 | 7.91 | 7.71 | 8.21 | 8.16 | 8.29 | 8.04 | 8.30 | |
| DOH | days | 44.08 | 45.38 | 51.43 | 53.23 | 58.41 | 58.39 | 52.16 | 50.11 | 52.87 | 53.93 | 53.29 | 50.60 | 48.91 | 46.17 | 47.31 | 44.48 | 44.72 | 44.02 | 45.39 | 43.96 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 8.28
= 44.08
To analyze Stepan Co.'s days of inventory on hand (DOH) based on the provided data, we can observe a decreasing trend in DOH over the past two years. In Q4 2023, the company held inventory for an average of 47.32 days, which decreased from 48.49 days in Q3 2023.
This decrease in DOH indicates that Stepan Co. is managing its inventory more efficiently by selling goods more quickly or replenishing inventory at a slower pace. A lower DOH implies that the company is effectively managing its inventory levels, potentially reducing carrying costs and minimizing the risk of holding obsolete or excess inventory.
Comparing Q4 2023 to the same quarter in the previous year (Q4 2022), Stepan Co. has shown a significant improvement, as DOH decreased from 62.62 days to 47.32 days. This suggests that the company has made strides in optimizing its inventory turnover and operational efficiency.
Overall, the decreasing trend in DOH over the observation period indicates that Stepan Co. is successfully managing its inventory levels, which can positively impact the company's cash flow, profitability, and overall operational performance. Additional analysis and context related to industry benchmarks and company-specific factors would provide further insights into the effectiveness of Stepan Co.'s inventory management strategies.
Peer comparison
Dec 31, 2023