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Analysis of Inventory

Difficulty: Advanced


Inventory Accounting Policy

Inventories are stated at the lower of average cost or market.

Source: Bristol-Myers Squibb Co., Annual Report


Inventory Disclosure

Bristol-Myers Squibb Co., Statement of Financial Position, Inventory

USD $ in millions

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Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Finished goods 384  310  381  500  491 
Work in process 931  988  646  856  757 
Raw and packaging materials 273  264  194  204  250 
Inventories 1,588  1,562  1,221  1,560  1,498 

Source: Based on data from Bristol-Myers Squibb Co. Annual Reports

Item Description The company
Finished goods Carrying amount as of the balance sheet date of merchandise or goods held by the company that are readily available for sale. Bristol-Myers Squibb Co.'s finished goods declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
Work in process Carrying amount as of the balance sheet date of merchandise or goods which are partially completed, are generally comprised of raw materials, labor and factory overhead costs, and which require further materials, labor and overhead to be converted into finished goods, and which generally require the use of estimates to determine percentage complete and pricing. Bristol-Myers Squibb Co.'s work in process increased from 2015 to 2016 but then slightly declined from 2016 to 2017.
Raw and packaging materials Carrying amount as of the balance sheet date of unprocessed items to be consumed in the manufacturing or production process. Also includes purchased parts that will be used as components of a finished product. Bristol-Myers Squibb Co.'s raw and packaging materials increased from 2015 to 2016 and from 2016 to 2017.
Inventories Carrying amount (lower of cost or market) as of the balance sheet date of inventories less all valuation and other allowances. Excludes noncurrent inventory balances (expected to remain on hand past one year or one operating cycle, if longer). Bristol-Myers Squibb Co.'s inventories increased from 2015 to 2016 and from 2016 to 2017.