Waters Corporation (WAT)

Days of inventory on hand (DOH)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover		4.02	4.32	5.18	5.34	4.98
DOH	days	90.82	84.41	70.50	68.37	73.29

December 31, 2023 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.02
= 90.82

The days of inventory on hand (DOH) for Waters Corp. have exhibited an increasing trend over the past five years, indicating a potential inefficiency in managing inventory levels.

In particular, the DOH has risen from 115.76 days in 2019 to 157.65 days in 2023, reflecting a prolonged period for the company to convert its inventory into sales. This suggests a potential risk of overstocking or slow-moving inventory, which can tie up working capital and lead to increased holding costs.

The significant increase in DOH from 2019 to 2023 may signal a need for Waters Corp. to reassess its inventory management practices to optimize inventory turnover and improve liquidity. It is crucial for the company to strike a balance between maintaining adequate inventory levels to meet customer demand and avoiding excess inventory that can weigh down profitability.

Overall, the trend in DOH for Waters Corp. indicates a potential area for operational improvement to enhance efficiency and financial performance in the future.