Trane Technologies plc (TT)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 1.46 | 1.35 | 1.68 | 9.28 | 11.54 | |
| DOH | days | 249.89 | 270.10 | 217.42 | 39.33 | 31.63 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.46
= 249.89
The days of inventory on hand (DOH) for Trane Technologies plc have shown a fluctuating trend over the past five years. In 2023, the company held inventory for an average of 66.45 days, slightly higher than the previous year's 66.00 days. This increase suggests that Trane Technologies may have been holding onto its inventory for a longer period in 2023.
Comparing to 2021 and 2020, where the DOH was 57.80 days and 50.17 days respectively, there has been a noticeable increase in the number of days it takes for the company to sell its inventory. This may indicate a potential build-up of inventory levels or slower inventory turnover in 2023 compared to the prior years.
However, the DOH in 2023 is still lower than in 2019 when it stood at 54.57 days. This suggests that despite the recent increase, Trane Technologies has improved its inventory management efficiency since 2019.
Overall, the increasing trend in the days of inventory on hand for Trane Technologies plc raises considerations about the company's inventory management practices and efficiency in turning inventory into sales. It may be worth investigating the reasons behind the longer inventory holding periods in recent years to optimize working capital and operational performance.