Analysis of Inventory
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Inventory Disclosure
Microsoft Corp., balance sheet: inventory
US$ in millions
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Raw materials | |||||||||||||
| Work in process | |||||||||||||
| Finished goods | |||||||||||||
| Inventories |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
The annual financial data concerning inventory components reveals several notable trends over the six-year period ending June 30, 2024. The overall inventory value fluctuated significantly, peaking in fiscal year 2022 before decreasing substantially by 2024.
- Raw materials
- The raw materials inventory exhibited an initial increase from 399 million USD in 2019 to 1,190 million USD in 2021. However, subsequent years saw a decline, falling to 709 million USD in 2023 and further to 394 million USD by 2024, returning nearly to the 2019 level. This pattern suggests a build-up in raw materials over the early period, possibly in anticipation of higher production, followed by a drawdown in more recent years.
- Work in process
- Work in process inventory remained relatively stable in the earlier years, ranging between 53 and 83 million USD from 2019 through 2022. However, a marked decrease occurred in 2023 and 2024, dropping sharply to 23 and then 7 million USD, respectively. This reduction may indicate improved production efficiency or a strategic reduction in goods in intermediate stages.
- Finished goods
- Finished goods inventory showed considerable variation. It began at 1,611 million USD in 2019 and dipped to 1,112 million USD in 2020, then increased to 1,367 million USD in 2021. A substantial surge to 2,516 million USD appeared in 2022, representing the highest level recorded during the period. Following that peak, finished goods declined to 1,768 million USD in 2023 and further to 845 million USD in 2024. This pattern could reflect fluctuations in demand or inventory management adjustments, with the 2022 peak potentially indicating overstocking or buildup ahead of anticipated sales.
- Total inventories
- Total inventory value mirrored these component trends, starting at 2,063 million USD in 2019 and decreasing slightly in 2020 to 1,895 million USD. A significant rise followed in 2021 and especially 2022, reaching a high of 3,742 million USD. The subsequent two years showed a marked decline, with inventories at 2,500 million USD in 2023 and 1,246 million USD in 2024. The elevated inventory levels in 2021 and 2022 suggest a period of inventory accumulation, while the sharp decline thereafter points to reduction efforts or potentially weaker stock replenishment requirements.
Overall, the inventory data demonstrates a cycle of buildup through 2021 and 2022, followed by substantial drawdown in 2023 and 2024 across all categories. This pattern may reflect a response to changing market conditions, internal operational shifts, or strategic inventory management aimed at optimizing working capital.