Teradyne Inc (TER)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		3.92	3.68	3.96	6.15	6.01
DOH	days	93.04	99.29	92.11	59.36	60.72

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.92
= 93.04

Days of inventory on hand (DOH) is a key efficiency ratio that measures how many days a company's inventory is held before being sold. A lower DOH is generally preferred as it indicates quicker turnover of inventory, reducing storage and holding costs.

Analyzing Teradyne Inc's DOH over the past five years shows some fluctuations. In December 2020, the company had 60.72 days of inventory on hand, which decreased slightly to 59.36 days by December 2021, reflecting a more efficient inventory management.

However, in December 2022, there was a significant increase in DOH to 92.11 days, which further rose to 99.29 days by December 2023, indicating a deterioration in inventory turnover efficiency. The high DOH values suggest that Teradyne Inc may be facing challenges in managing its inventory effectively, such as overstocking or slowing demand.

By December 2024, the DOH decreased to 93.04 days, but it still remains significantly higher compared to the initial years in the period under review. It is important for Teradyne Inc to closely monitor and optimize its inventory management processes to improve efficiency and reduce costs associated with carrying excess inventory.