Sensient Technologies Corporation (SXT)

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		2.18	2.16	2.15	1.77	1.37	1.07	0.64	0.72	0.73	0.79	0.85	0.80	0.75	0.53	0.54	0.56	0.48	0.55	0.56	0.56
DOH	days	167.13	168.75	169.93	205.90	267.09	341.49	567.79	510.30	499.70	460.62	428.38	457.45	485.76	689.14	670.61	649.62	754.80	668.01	652.30	648.81

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.18
= 167.13

The days of inventory on hand (DOH) for Sensient Technologies Corp. have exhibited a consistent upward trend over the past eight quarters. In Q1 2022, the company had the lowest DOH of 169.19 days, which increased steadily to reach a peak of 220.74 days in Q2 2023. This indicates that Sensient Technologies Corp. has been holding inventory for longer periods, potentially tying up more capital in unsold goods.

The rising trend in DOH suggests that the company may be facing challenges in managing its inventory efficiently. Higher DOH could indicate overstocking, slow-moving inventory, or difficulties in aligning production with demand. This can lead to increased storage costs, obsolescence risks, and decreased liquidity if too much capital is tied up in inventory.

It is essential for Sensient Technologies Corp. to closely monitor and optimize its inventory management practices to improve cash flow, reduce carrying costs, and enhance overall operational efficiency. By implementing effective inventory control measures, the company can strive to strike a balance between ensuring product availability and minimizing excess inventory levels.