Cactus Inc (WHD)
Days of inventory on hand (DOH)
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 0.77 | 0.88 | 0.63 | 0.55 | 0.39 | 0.53 | 0.40 | 0.41 | 0.42 | 0.53 | 0.51 | 0.54 | 0.54 | 0.70 | 0.56 | 0.62 | 0.61 | 0.56 | 0.49 | 0.46 | |
| DOH | days | 471.26 | 415.79 | 580.08 | 667.61 | 931.42 | 682.90 | 920.36 | 895.96 | 866.71 | 691.79 | 716.48 | 675.48 | 674.44 | 521.48 | 652.66 | 591.53 | 594.56 | 647.00 | 748.91 | 801.48 |
March 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 0.77
= 471.26
The days of inventory on hand (DOH) for Cactus Inc have fluctuated significantly over the periods examined. DOH represents the average number of days it takes for the company to sell its inventory. A lower DOH indicates that the company is selling its inventory more quickly.
From the data provided, we observe that the DOH has shown a general trend of inconsistency, with peaks and troughs across different quarters. For example, the DOH ranged from a low of 415.79 days on Dec 31, 2023, to a high of 931.42 days on Mar 31, 2023.
The significant variability in DOH can be an indicator of potential inefficiencies in inventory management. For instance, a high DOH may suggest overstocking or slow-moving inventory, which could tie up the company's resources and lead to higher holding costs. On the other hand, a very low DOH could indicate stockouts and missed sales opportunities.
To improve operational efficiency and financial performance, Cactus Inc should focus on optimizing its inventory management processes to strike a balance between carrying enough inventory to meet demand and avoiding excess stock levels. This could involve implementing better forecasting techniques, adopting lean inventory practices, and enhancing supply chain management to align inventory levels with sales activity more effectively.
Peer comparison
Mar 31, 2024