Xpel Inc (XPEL)
Days of inventory on hand (DOH)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Inventory turnover | 2.19 | 2.20 | 2.44 | 3.21 | 4.69 | |
| DOH | days | 166.56 | 166.22 | 149.68 | 113.79 | 77.82 |
December 31, 2024 calculation
DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.19
= 166.56
To analyze Xpel Inc's days of inventory on hand (DOH) based on the provided data:
1. The DOH for Xpel Inc increased from 77.82 days as of December 31, 2020, to 113.79 days as of December 31, 2021, indicating a lengthening period for the company to sell its inventory.
2. The trend of DOH continued to rise significantly, reaching 149.68 days as of December 31, 2022, and further to 166.22 days as of December 31, 2023, implying a potential buildup of excess inventory relative to sales.
3. The DOH remained relatively stable at 166.56 days as of December 31, 2024, suggesting a possible plateau in the company's inventory management practices.
4. A high DOH figure may indicate inefficiencies in inventory management, potential overstocking, slower inventory turnover, or inadequate demand forecasting, which could lead to increased holding costs and tied-up capital.
5. Xpel Inc may need to review its inventory control mechanisms, optimize procurement processes, strengthen demand forecasting, and reevaluate its inventory levels to enhance operational efficiency and profitability.
In conclusion, the consistent increase and stabilization of Xpel Inc's days of inventory on hand highlight the importance of effective inventory management strategies to maintain a healthy balance between inventory levels and sales demand.