United Rentals Inc (URI)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		41.56	28.65	35.75	42.78	47.34
DOH	days	8.78	12.74	10.21	8.53	7.71

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 41.56
= 8.78

To analyze United Rentals, Inc.'s Days of Inventory on Hand (DOH) over the past five years, we compare the ratio of inventory to cost of goods sold for each year. The DOH ratio indicates the average number of days it takes for the company to sell its inventory.

The trend in United Rentals' DOH over the past five years shows fluctuations. The ratio stood at 12.13 days at the end of 2023, declining from 17.67 days in 2022, and 14.08 days in 2021, but higher compared to 12.18 days in 2020 and 10.81 days in 2019.

The downward trend from 2022 to 2023 indicates an improvement in inventory management efficiency. However, the comparison with the 2020 and 2019 figures shows that the DOH has increased, suggesting a lengthening of the average time inventory is held before being sold.

A higher DOH may indicate excessive inventory levels, obsolete inventory, or slowing sales. Consequently, it is essential for United Rentals to monitor and manage its inventory levels effectively to optimize working capital and reduce holding costs. It may also consider identifying and addressing factors contributing to the increase in DOH.