Analysis of Inventory
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Baxter International Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Total Asset Turnover since 2005
- Aggregate Accruals
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Inventory Disclosure
Baxter International Inc., balance sheet: inventory
US$ in millions
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Raw materials | |||||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| Inventories |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
The financial data reveals notable trends in the inventory components over the five-year period ending December 31, 2015.
- Raw Materials
- The value of raw materials exhibited a general increase from 596 million US dollars in 2011, peaking at 920 million in 2013. However, a declining trend follows with a reduction to 910 million in 2014 and a significant drop to 374 million in 2015. This sharp decrease in 2015 contrasts with the overall earlier growth and may suggest changes in procurement strategies or production planning.
- Work in Process
- Work in process inventory showed some fluctuation, starting at 923 million US dollars in 2011, dipping slightly to 898 million in 2012, then rising to a peak of 1136 million in 2013 and maintaining a similar level of 1126 million in 2014. There is a stark decline to 142 million in 2015, indicating a substantial reduction in unfinished goods on hand, which may imply improved production efficiency or lower production volume.
- Finished Goods
- Finished goods inventory increased steadily from 1109 million in 2011 to a high of 1523 million in 2014, reflecting accumulation of completed products. However, in 2015, this number decreased notably to 1088 million. This decline, along with the drop in raw materials and work in process, could be indicative of changes in sales levels or inventory management policies.
- Inventories (Total)
- Total inventory values rose consistently from 2628 million US dollars in 2011 to a peak of 3559 million in 2014. In 2015, the total inventory halved to 1604 million, driven by decreases across all inventory components, particularly raw materials and work in process. This reduction is significant and suggests a strategic shift toward leaner inventory levels or adjustments in business operations during that year.