Transdigm Group Incorporated (TDG)
Days of inventory on hand (DOH)
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 1.74 | 1.65 | 1.71 | 1.69 | 1.70 | 1.63 | 1.62 | 1.67 | 1.75 | 1.71 | 1.80 | 1.85 | 1.93 | 1.93 | 1.88 | 1.84 | 1.92 | 1.84 | 2.10 | 2.05 | |
| DOH | days | 209.59 | 221.12 | 214.07 | 216.09 | 215.11 | 224.52 | 225.67 | 218.76 | 208.66 | 213.19 | 202.29 | 196.92 | 189.21 | 188.74 | 193.67 | 198.58 | 190.60 | 197.89 | 173.89 | 178.30 |
September 30, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.74
= 209.59
The Days of Inventory on Hand (DOH) ratio for Transdigm Group Incorporated has fluctuated over the past several quarters, ranging from 173.89 days to 225.67 days. A high DOH indicates that the company holds inventory for an extended period before selling it, which could tie up working capital and lead to higher storage costs.
The trend in the DOH ratio shows some volatility, with peaks and troughs observed throughout the periods under review. Generally, a consistent increase in the DOH ratio could suggest inefficiencies in inventory management or potential issues with demand forecasting. Conversely, a declining DOH ratio may indicate improved inventory turnover and potentially better cash flow management.
It would be advisable for Transdigm to closely monitor its inventory levels and strive to strike a balance between stocking enough inventory to meet demand while minimizing excess inventory holding costs. By optimizing inventory management practices, the company can improve its operational efficiency and financial performance over time.