Standard Motor Products Inc (SMP)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		1.67	1.85	1.80	1.88	2.17
DOH	days	219.21	197.78	202.34	194.41	168.29

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.67
= 219.21

Standard Motor Products Inc's days of inventory on hand (DOH) have been fluctuating over the years, starting at 168.29 days on December 31, 2020, and reaching a peak of 219.21 days on December 31, 2024. This indicates that the company, on average, holds inventory for a longer period before turning it into sales.

The increase in DOH from 2020 to 2024 suggests that Standard Motor Products Inc may be facing challenges in managing its inventory efficiently. A higher DOH could lead to increased carrying costs, risk of obsolescence, and reduced cash flow due to tied-up capital in inventory.

Management should closely monitor and analyze the inventory turnover ratio to ensure that the company's inventory levels are in line with sales demand. Implementing inventory control measures, such as optimizing reorder quantities and improving forecasting accuracy, can help Standard Motor Products Inc reduce its DOH and enhance overall operational efficiency.