Smurfit WestRock plc (SW)
Days of inventory on hand (DOH)
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Dec 31, 2022 | Jun 30, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 5.36 | 4.59 | — | — | 13.84 | — | 15.87 | 14.10 | — | — | |
| DOH | days | 68.15 | 79.51 | — | — | 26.38 | — | 23.00 | 25.88 | — | — |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 5.36
= 68.15
The days of inventory on hand (DOH) ratio measures the average number of days a company holds its inventory before selling it. For Smurfit WestRock plc, the DOH has fluctuated over the analyzed periods as follows:
1. December 31, 2022: 25.88 days
2. June 30, 2023: 23.00 days
3. December 31, 2023: 26.38 days
4. September 30, 2024: 79.51 days
5. December 31, 2024: 68.15 days
A lower DOH indicates faster inventory turnover, suggesting efficient management in converting inventory into sales. Hence, the decrease in DOH from December 31, 2022, to June 30, 2023, followed by a slight increase by December 31, 2023, reflects some variability in inventory management efficiency during these periods.
However, the significant increase in DOH by September 30, 2024, and December 31, 2024, indicates a potential concern. A higher DOH may signify excess or obsolete inventory, which can tie up working capital and lead to increased holding costs.
Further analysis and comparison to industry benchmarks are recommended to assess the effectiveness of inventory management practices within Smurfit WestRock plc and to identify areas for improvement in optimizing inventory levels.
Peer comparison
Dec 31, 2024