UFP Technologies Inc (UFPT)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		6.45	4.93	5.94	5.75	9.08
DOH	days	56.60	74.10	61.48	63.49	40.22

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 6.45
= 56.60

The days of inventory on hand (DOH) for UFP Technologies Inc has shown variability in recent years. The ratio increased from 40.22 days as of December 31, 2020, to 63.49 days by December 31, 2021, indicating an increase in the number of days it takes to turn inventory into sales. This trend continued with a slight decrease to 61.48 days by December 31, 2022, but then rose again to 74.10 days by December 31, 2023.

However, there was a noticeable improvement by December 31, 2024, with the DOH dropping to 56.60 days. A lower DOH suggests that the company is managing its inventory more efficiently by selling goods more quickly relative to the level of inventory on hand. It is imperative for UFP Technologies Inc to continue monitoring and potentially optimizing their inventory management practices to ensure a healthy balance between holding enough inventory to meet demand and avoiding excess stock that could tie up capital and result in increased holding costs.