Woodward Inc (WWD)
Days of inventory on hand (DOH)
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 4.59 | 4.94 | 4.08 | 4.60 | 4.96 | |
| DOH | days | 79.60 | 73.90 | 89.52 | 79.37 | 73.56 |
September 30, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.59
= 79.60
To analyze Woodward Inc's Days of Inventory on Hand (DOH) over the past five years, we observe a fluctuating trend in the efficiency of managing inventory.
In 2020 and 2021, Woodward Inc had relatively low DOH figures of 73.56 days and 79.37 days, indicating a faster turnover of inventory. This suggests efficient inventory management and a shorter time taken to sell off inventory, which is generally considered favorable for liquidity and working capital management.
However, in 2022 and 2024, there was an increase in DOH to 89.52 days and 79.60 days, respectively. This rise could imply a longer time taken to turn over inventory, which may signal potential issues such as overstocking, slow-moving inventory, or reduced demand for Woodward Inc's products during those periods.
The decrease in DOH in 2023 back to 73.90 days may indicate a corrective action taken by the company to optimize inventory levels and improve efficiency.
Overall, Woodward Inc should focus on maintaining an optimal balance in managing inventory levels to ensure liquidity, reduce holding costs, and meet customer demand effectively. Efforts to identify and address the factors contributing to fluctuations in DOH will be crucial for sustaining operational efficiency and profitability in the future.