Name: Allergan PLC (NYSE:AGN) | Analysis of Inventory
Creator: Stock Analysis on Net

Analysis of Inventory

Inventory Disclosure

Inventory Disclosure

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Allergan PLC, balance sheet: inventory

US$ in thousands

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Raw materials	455,200)	303,200)	326,900)	297,100)	242,300)
Work-in-process	246,200)	145,700)	158,100)	145,400)	149,700)
Finished goods	581,700)	520,200)	527,800)	357,700)	706,300)
Inventories, gross	1,283,100)	969,100)	1,012,800)	800,200)	1,098,300)
Inventory reserves	(150,000)	(122,200)	(108,300)	(82,200)	(88,600)
Inventories	1,133,100)	846,900)	904,500)	718,000)	1,009,700)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

The inventory position exhibited significant volatility between 2015 and 2019, characterized by a sharp contraction in 2016 followed by a steady recovery and a substantial increase in the final year of the period. Net inventories rose from 1,009,700 thousand USD in 2015 to 1,133,100 thousand USD in 2019, with the most pronounced growth occurring in the most recent fiscal year.

Gross Inventory Trends: Gross inventories experienced a notable decline in 2016, dropping from 1,098,300 thousand USD to 800,200 thousand USD. Subsequently, values trended upward, reaching a five-year peak of 1,283,100 thousand USD by December 31, 2019. This suggests a strategic increase in stock levels or a response to expanded production requirements toward the end of the analyzed period.
Inventory Component Analysis: Raw materials and work-in-process inventories both demonstrated significant growth, particularly in 2019. Raw materials increased from 242,300 thousand USD in 2015 to 455,200 thousand USD in 2019, while work-in-process rose from 149,700 thousand USD to 246,200 thousand USD over the same period. Conversely, finished goods showed high volatility, plummeting from 706,300 thousand USD in 2015 to 357,700 thousand USD in 2016, before stabilizing and recovering to 581,700 thousand USD by 2019.
Inventory Valuation Reserves: A consistent upward trend is observed in inventory reserves, which increased every year from 2015 to 2019. Reserves grew from 88,600 thousand USD to 150,000 thousand USD, indicating a rising allowance for obsolescence or a decrease in the realizable value of certain stock components relative to their cost.
Net Inventory Position: The net inventory value mirrors the trajectory of gross inventories, hitting a trough in 2016 at 718,000 thousand USD. The increase in net inventories in 2019 was driven primarily by the surge in raw materials and work-in-process, which outweighed the simultaneous increase in inventory reserves.

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