Teradyne Inc (TER)

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		3.68	3.60	3.44	3.55	3.96	4.29	4.64	5.69	6.15	6.45	6.32	5.17	6.01	6.78	5.70	5.72	4.86	5.02	5.41	5.39
DOH	days	99.29	101.53	105.98	102.92	92.11	84.99	78.63	64.10	59.36	56.55	57.78	70.60	60.72	53.80	64.05	63.76	75.16	72.78	67.45	67.75

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.68
= 99.29

Teradyne, Inc.'s days of inventory on hand (DOH) has shown an increasing trend over the past eight quarters, indicating that the company is taking longer to sell its inventory. The average DOH over the past four quarters is 102.93 days, which is higher compared to the previous four quarters average of 80.46 days. This suggests that Teradyne may be facing challenges in efficiently managing its inventory levels or experiencing slower inventory turnover.

The spike in DOH from Q1 2022 to Q2 2023 indicates a significant increase in the number of days it takes for Teradyne to sell off its inventory, reflecting a potential issue with inventory management. A DOH of over 100 days in the most recent quarters Q3 and Q4 2023 may raise concerns about the company's liquidity and working capital management, as excess inventory ties up cash that could have been used for other investments or operations.

It is important for Teradyne to closely monitor its inventory levels, streamline its supply chain processes, and possibly reassess its demand forecasting to improve inventory turnover and reduce DOH. High DOH values can result in increased storage costs, risk of obsolescence, and reduced profitability. Management should focus on implementing strategies to optimize inventory management practices to enhance operational efficiency and financial performance.