Analysis of Inventory
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Analysis of Revenues
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Inventory Disclosure
Builders FirstSource Inc., balance sheet: inventory
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The analysis of the inventory data over the five-year period reveals notable trends and fluctuations. Initially, the net inventories decreased from 596,896 thousand US dollars in 2018 to 561,255 thousand US dollars in 2019, indicating a reduction of approximately 5.98%. This decline may suggest improved inventory management or changes in sales and supply chain dynamics during that year.
However, from 2019 to 2020, there was a significant increase in inventories, rising to 784,527 thousand US dollars, which represents an increase of about 39.75%. This sharp rise could be indicative of expanded procurement, buildup in stock to meet anticipated demand, or potential delays in inventory turnover during that period.
The upward trend continued markedly into 2021, with inventories more than doubling to 1,626,244 thousand US dollars, amounting to a substantial increase of approximately 107.37% compared to the previous year. Such a surge suggests aggressive accumulation of inventory, possibly to support higher sales volumes, or it may reflect challenges in moving inventory efficiently.
In 2022, inventories decreased slightly to 1,426,196 thousand US dollars, a reduction of about 12.29% from 2021 levels. Despite this decrease, the inventory level remains significantly higher compared to earlier years, indicating sustained elevated stock levels. This decrease could represent efforts to optimize inventory or a moderation in demand forecasts.
- Summary of Inventory Trends
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The inventory data exhibits a general trend of significant growth over the five-year period, with a notable dip in 2019 followed by sharp increases in 2020 and 2021. The slight reduction in 2022 suggests a possible adjustment or normalization following a period of rapid inventory growth.
The substantial increases in inventories in recent years might reflect strategic decisions related to market demand, supply chain conditions, or operational scaling. Conversely, the high inventory levels may pose risks associated with carrying costs, potential obsolescence, or liquidity impact.