Trex Company Inc (TREX)
Days of inventory on hand (DOH)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 4.08 | 7.65 | 5.97 | 11.01 | 9.49 | |
| DOH | days | 89.41 | 47.72 | 61.11 | 33.16 | 38.46 |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.08
= 89.41
The days of inventory on hand (DOH) for Trex Company Inc has shown some fluctuations over the years. In December 31, 2020, the company had an inventory holding period of 38.46 days, which decreased to 33.16 days by December 31, 2021. However, in the subsequent year, the DOH increased significantly to 61.11 days by December 31, 2022. This rise in DOH suggests that the company may have been holding excess inventory or facing challenges in managing its inventory efficiently.
By December 31, 2023, the DOH decreased to 47.72 days, indicating a potential improvement in inventory management practices. Nevertheless, by December 31, 2024, the DOH surged to 89.41 days, reaching a notably high level. Such an extended inventory holding period could lead to increased carrying costs, potential obsolescence, and reduced liquidity if inventory cannot be converted to sales promptly.
Overall, the trend in Trex Company Inc's DOH indicates some variability in inventory management effectiveness over the years. It is essential for the company to monitor and optimize its inventory levels continuously to strike a balance between satisfying customer demand and minimizing holding costs.
Peer comparison
Dec 31, 2024