Watts Water Technologies Inc (WTS)
Days of inventory on hand (DOH)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 4.31 | 4.47 | 4.28 | 5.09 | 5.26 | |
| DOH | days | 84.67 | 81.57 | 85.38 | 71.68 | 69.42 |
December 31, 2023 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.31
= 84.67
The days of inventory on hand (DOH) for Watts Water Technologies, Inc. have shown a fluctuating trend over the past five years. The company's DOH was 133.05 days as of December 31, 2023, which is higher compared to the previous year's DOH of 124.04 days. This increase indicates that the company is carrying inventory for a longer period before it is being sold.
Looking back at the trend, the DOH was relatively stable around the 100-day mark in 2020 and 2019, but saw an increase in 2021 and 2022. The significant increase in 2021 to 129.84 days was followed by a further rise in 2022. This suggests a potential inefficiency in managing inventory levels or challenges in matching inventory with sales demands during these years.
It is essential for Watts Water Technologies to effectively manage its inventory levels to optimize working capital and minimize carrying costs associated with excess inventory. A high DOH can tie up valuable resources and negatively impact cash flow. The company may need to review its inventory management practices and consider implementing strategies to improve inventory turnover and reduce holding periods in order to enhance operational efficiency and profitability.
Peer comparison
Dec 31, 2023