Valero Energy Corporation (VLO)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		17.39	23.64	17.69	10.87	14.76
DOH	days	20.99	15.44	20.63	33.57	24.72

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 17.39
= 20.99

The days of inventory on hand (DOH) for Valero Energy Corp. has varied over the past five years. In 2023, the DOH stood at 22.49 days, indicating that on average, the company held inventory for approximately 22.49 days before it was sold. This represents an increase from the previous year, where the DOH was 16.35 days.

Comparing further to previous years, the DOH in 2023 is lower than in 2020 when it was 37.41 days, but higher than in 2019 when it was 26.53 days. The highest DOH in recent years was in 2020, suggesting that Valero held inventory for an extended period before selling it.

A relatively lower DOH indicates efficient inventory management, as the company is able to sell inventory quickly, reducing carrying costs and the risk of obsolescence. Conversely, a higher DOH may suggest inefficiencies in inventory management, potentially tying up working capital and leading to increased storage costs.

Overall, while the increase in DOH from the previous year may raise concerns about inventory management efficiency, it is important to consider industry trends and specific business circumstances when interpreting this ratio. Additional analysis and context would be necessary to fully evaluate the implications of Valero's days of inventory on hand.