Trane Technologies plc (TT)
Days of inventory on hand (DOH)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 1.91 | 1.46 | 1.35 | 1.68 | 9.28 | |
| DOH | days | 191.33 | 249.89 | 270.10 | 217.42 | 39.33 |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.91
= 191.33
The days of inventory on hand (DOH) for Trane Technologies plc have shown a significant increase over the past five years. As of December 31, 2020, the company held inventory for approximately 39.33 days, indicating a relatively efficient inventory management. However, this figure has seen a notable uptrend, with the DOH reaching 217.42 days by December 31, 2021, and further climbing to 270.10 days by December 31, 2022.
This prolonged period of holding inventory suggests potential challenges in managing and selling their stock efficiently. The trend continued in December 31, 2023, with DOH standing at 249.89 days, indicating continued pressure on inventory turnover. However, there was a slight improvement in December 31, 2024, with DOH decreasing to 191.33 days, although still significantly higher than the starting point.
The sustained high DOH values may imply excess inventory levels, slow-moving goods, or challenges in demand forecasting and production planning. Further analysis of the underlying reasons for this trend is recommended to address potential inefficiencies in inventory management processes.