Trex Company Inc (TREX)
Days of inventory on hand (DOH)
| Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 4.08 | 4.58 | 6.04 | 7.20 | 7.65 | 13.47 | 10.34 | 6.12 | 5.97 | 7.23 | 10.15 | 10.03 | 11.01 | 11.11 | 9.78 | 9.11 | 9.49 | 11.55 | 11.29 | 9.58 | |
| DOH | days | 89.43 | 79.63 | 60.41 | 50.71 | 47.74 | 27.10 | 35.31 | 59.68 | 61.13 | 50.46 | 35.95 | 36.38 | 33.16 | 32.84 | 37.33 | 40.08 | 38.47 | 31.60 | 32.32 | 38.12 |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.08
= 89.43
The days of inventory on hand (DOH) for Trex Company Inc have fluctuated over the past few years. The company maintained a relatively stable DOH around the 30-40 day range from March 2020 to June 2021, indicating efficient management of inventory levels. However, there was a noticeable increase in DOH from September 2021 onwards, reaching a peak of 89.43 days by December 2024.
This significant rise in DOH may suggest potential issues with inventory management, such as overstocking or slower inventory turnover. A high DOH means that it takes the company a longer time to sell its inventory, tying up capital and potentially leading to increased carrying costs and obsolescence risk.
It would be advisable for Trex Company Inc to closely monitor and optimize its inventory management practices to ensure efficiency and prevent unnecessary holding costs. This could involve implementing better demand forecasting, optimizing reorder quantities, and identifying slow-moving or obsolete inventory for disposal or discounting. Additionally, the company may need to review its production processes and supply chain to streamline inventory flows and minimize excess stock levels.
Peer comparison
Dec 31, 2024