SolarEdge Technologies Inc (SEDG)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		1.57	3.11	3.51	3.01	5.54
DOH	days	231.82	117.48	103.97	121.32	65.88

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.57
= 231.82

The days of inventory on hand (DOH) for Solaredge Technologies Inc have shown fluctuating trends over the past five years. In 2019, the company had the lowest DOH at 65.88 days, indicating efficient inventory management. However, by 2023, the DOH had significantly increased to 231.82 days, suggesting a potential buildup of inventory relative to sales.

The sharp increase in DOH from 2021 to 2023 is a cause for concern as it may indicate excessive inventory levels or slower inventory turnover. This could tie up working capital, increase holding costs, and potentially lead to obsolete inventory issues.

Further analysis is needed to understand the reasons behind the rising DOH and whether it is a strategic decision or a sign of operational inefficiencies. Comparing industry benchmarks and historical trends can provide additional context for evaluating Solaredge's inventory management performance.