Analysis of Inventory
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Aggregate Accruals
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Inventory Disclosure
Amgen Inc., balance sheet: inventory
US$ in millions
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Raw materials | |||||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| Inventories |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Inventory Composition and Trends
- Over the five-year period, the total inventories exhibited a significant upward trend from US$3,893 million in 2020 to a peak of US$9,518 million in 2023, followed by a reduction to US$6,998 million in 2024. This pattern suggests a buildup of stock that peaked before a partial drawdown.
- Raw Materials
- The raw materials inventory showed a consistent rise from US$486 million in 2020 to US$993 million in 2023, nearly doubling over the four-year period, before decreasing to US$818 million in 2024. This indicates increasing procurement or stockpiling of materials through 2023, with possible optimization or consumption reducing the inventory in the subsequent year.
- Work in Process
- The work in process inventory exhibited more pronounced fluctuations. Starting at US$2,437 million in 2020, it slightly declined to US$2,367 million in 2021, then surged to US$3,098 million in 2022. The upward trend continued sharply to US$5,747 million in 2023, before declining to US$4,120 million in 2024. This reflects increased manufacturing activity or production complexity leading to greater WIP balances, peaking in 2023, and then a reduction which may indicate improved production flow or sales.
- Finished Goods
- Finished goods inventory grew from US$970 million in 2020 to US$1,072 million in 2021, slightly declining to US$1,004 million in 2022. There was a substantial increase to US$2,778 million in 2023, followed by a decrease to US$2,060 million in 2024. This pattern mirrors the overall inventory trend, with a large buildup of finished products in 2023, potentially to meet anticipated demand, and a drawdown thereafter.
- Overall Insights
- The substantial growth in work in process and finished goods inventories in 2023 suggests a strategic stock accumulation possibly due to expected increases in demand or supply chain considerations. The subsequent decreases in 2024 imply a normalization, likely driven by sales realization or inventory management efforts. The peak inventory levels may affect working capital requirements and liquidity, while the fluctuations indicate responsiveness to operational or market conditions.