Watsco Inc (WSO)
Days of inventory on hand (DOH)
| 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 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 3.93 | 3.39 | 3.06 | 3.27 | 3.83 | 3.75 | 3.38 | 3.48 | 4.14 | 4.21 | 4.07 | 3.97 | 4.90 | 4.26 | 4.29 | 3.90 | 3.92 | 3.65 | 3.58 | 3.84 | |
| DOH | days | 92.93 | 107.73 | 119.14 | 111.74 | 95.37 | 97.30 | 107.84 | 104.75 | 88.27 | 86.74 | 89.75 | 92.04 | 74.42 | 85.62 | 85.00 | 93.60 | 93.01 | 99.97 | 102.05 | 95.15 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 3.93
= 92.93
Watsco Inc.'s days of inventory on hand (DOH) has shown fluctuations over the past eight quarters. The trend indicates an increase in inventory holding period, with Q2 2023 displaying the highest DOH at 119.14 days, followed by Q3 2023 at 107.73 days. These elevated figures suggest a potential buildup in inventory levels, which could lead to increased holding costs and liquidity concerns.
Comparing the latest quarter, Q4 2023 with the previous quarters, it is observed that DOH has decreased slightly to 92.93 days. This reduction may signal a positive development, indicating a potential optimization of inventory management practices to enhance efficiency.
It is essential for Watsco Inc. to continually monitor and control its inventory levels to strike a balance between meeting customer demand and avoiding excessive holding costs. Analyzing the reasons behind fluctuations in DOH can provide valuable insights for strategic decision-making in inventory management.