DuPont de Nemours Inc. (NYSE:DD)

The analysis of the inventory data over the five-year period reveals significant fluctuations and notable trends in the composition and total value of inventories.

Finished Goods

The finished goods inventory displayed a rising trend from 2015 to 2018, increasing from $3,879 million to a peak of $9,814 million. However, in 2019, there was a sharp decline to $2,621 million, which represents a substantial reduction compared to the prior years.

Work in Process

Work in process inventories also showed an upward trajectory from 2015 through 2017, growing from $1,502 million to $4,512 million, followed by a slight decrease in 2018 to $3,969 million and a marked drop in 2019 to $855 million. This pattern suggests a build-up in intermediate inventories that was not maintained into the latest period.

Raw Materials

Raw materials inventories increased steadily between 2015 and 2018, rising from $730 million to $1,419 million, but then decreased notably to $599 million in 2019. This indicates a reduction in raw materials held by the company in the final year of the analyzed period.

Supplies

Inventories of supplies followed a trend similar to raw materials, increasing from $768 million in 2015 to $1,321 million in 2018 and then falling sharply to $244 million in 2019. This parallels the declines seen in other inventory categories in the final year.

FIFO Inventories

When examining inventories valued on a FIFO basis, the values increased significantly from $6,879 million in 2015 to $16,523 million in 2018. However, by 2019, FIFO inventories dropped considerably to $4,319 million, reflecting the abrupt decrease consistent across inventory types.

Adjustment of Inventories to a LIFO Basis

The adjustment from FIFO to LIFO showed minor fluctuations between negative and positive values from 2015 through 2018. There was a negative adjustment in 2015 and 2016 (indicating LIFO values were lower than FIFO), a positive adjustment in 2017 and 2018, but no data for 2019, complicating the analysis for that year.

Total Inventories

Total inventories closely mirrored the pattern observed in FIFO inventories, increasing from $6,871 million in 2015 to a peak of $16,621 million in 2018, before declining steeply to $4,319 million in 2019. The absence of the LIFO adjustment value in 2019 means total inventories correspond directly to FIFO figures for that year.

In summary, the data indicate strong growth in inventory levels from 2015 through 2018, with substantial increases across finished goods, work in process, raw materials, and supplies. However, 2019 experienced a pronounced reduction in all inventory components, suggesting either a strategic inventory drawdown, improved inventory management, or external factors impacting inventory holding. The wide variances in inventory levels may have implications for working capital and operational efficiency that warrant further investigation.

The financial data exhibits distinct trends across the reported and inventory LIFO reserve adjusted figures over the five-year period ending December 31, 2019.

Inventories

Reported inventories increased steadily from 2015 to 2017, peaking dramatically in 2017 at 16,992 million USD before slightly declining in 2018 and falling sharply to 4,319 million USD in 2019. Adjusted inventories follow a similar pattern, suggesting consistent adjustments relating to LIFO reserve effects, but both measures show a substantial reduction in 2019.

Current Assets

Reported current assets rose sharply from 23,659 million USD in 2016 to nearly 49,893 million USD in 2017 and maintained similar levels through 2018, before plunging to 9,999 million USD in 2019. Adjusted current assets mirror this trend closely, indicating that the adjustments for LIFO reserve are consistent and do not significantly alter the overall trend.

Total Assets

The total assets exhibited explosive growth between 2016 and 2017, reaching over 192 billion USD reported and nearly 192 billion USD adjusted, followed by a slight decline in 2018 and a sharp contraction in 2019 to approximately 69 billion USD. The adjustments for LIFO reserves had a minimal impact on the overall figures but confirm the large swings between years.

Stockholders’ Equity

Reported total stockholders’ equity increased significantly from 25,374 million USD in 2015 to a peak of over 100 billion USD in 2017, slightly decreased in 2018, and then dropped substantially to 40,987 million USD in 2019. Adjusted equity values show marginally higher amounts but follow the same trajectory, underscoring a marked decline in equity during the final year.

Net Income Attributable to DuPont

Reported net income saw a steep decline from 7,685 million USD in 2015 down to 1,460 million USD in 2017, briefly recovering to 3,844 million USD in 2018 before falling drastically to 498 million USD in 2019. Adjusted net income values are consistently lower than reported figures, indicating the impact of LIFO reserve adjustments, but both series display similar patterns with significant reductions approaching the end of the period.

Overall, the data reveals significant volatility particularly post-2016, with peak values in 2017 followed by sizable declines in most financial metrics by 2019. The adjustments for the inventory LIFO reserve cause slight but consistent reductions across measures, reflecting the company's accounting for inventory cost flow assumptions. The substantial drops in inventories, current assets, total assets, stockholders’ equity, and net income in 2019 suggest pivotal structural or operational changes impacting the company’s financial position and performance during that year.

The reported and adjusted financial data reveal several notable trends over the period from 2015 to 2019. The current ratio experienced a decline, moving from a relatively strong liquidity position of 2.18 in 2015 down to a notably lower 1.2 in 2019. The adjusted current ratios closely mirror the reported values, indicating minimal influence from LIFO reserve adjustments on this liquidity metric.

Profitability, as measured by the net profit margin, shows a sharp decrease over the examined years. Starting at a high of approximately 15.76% reported (14.6% adjusted) in 2015, the margin declines dramatically, reaching around 2.31% by 2019. There is a slight discrepancy between reported and adjusted margins, especially noticeable in earlier periods, but the downward trend persists in both bases.

The total asset turnover ratio declined significantly as well, indicating a reduced efficiency in utilizing assets to generate revenues. The ratio fell from 0.72 in 2015 to as low as 0.31 in 2019, with adjusted figures identical to reported ones, which suggests that inventory accounting adjustments had negligible effect on asset turnover calculations.

Financial leverage decreased from a higher level of 2.68 in 2015 to 1.69 in 2019, showing a reduction in the company's reliance on debt relative to equity. The adjustments for LIFO reserves did not affect this leverage metric as the adjusted and reported values are the same.

Return on equity (ROE) and return on assets (ROA), key profitability indicators, both experienced steep decreases throughout the period. Reported ROE dropped from 30.29% in 2015 to a mere 1.22% in 2019, with adjusted ROE tracking similarly. Likewise, ROA declined from 11.3% to 0.72% over the same timeframe, with adjusted ROA slightly lower but consistent with reported figures, underscoring a significant deterioration in profitability and asset efficiency.

Overall, the data depicts a company facing diminishing liquidity ratios, lower profitability margins, reduced asset turnover, and decreasing financial leverage, ultimately resulting in markedly lower returns on equity and assets. The minimal differences between reported and adjusted figures suggest that LIFO reserve effects have limited impact on these key financial ratios during this period.

The analyzed financial metrics reveal several trends over the five-year period ending December 31, 2019. Both reported and inventory LIFO reserve adjusted current assets experienced fluctuations, with a notable substantial increase in 2017 and 2018 followed by a sharp decline in 2019.

Current Assets

Reported current assets showed a moderate decrease from 2015 to 2016, falling from 24,475 million USD to 23,659 million USD. This was followed by a significant jump in 2017 to 49,893 million USD, which remained relatively stable in 2018 at 49,603 million USD before dropping sharply to 9,999 million USD in 2019.

The adjusted current assets closely mirrored the reported figures, with values of 24,483 million USD in 2015 and 23,712 million USD in 2016. They similarly surged to 49,677 million USD in 2017 and remained steady at 49,505 million USD in 2018, before experiencing the same steep decline to 9,999 million USD in 2019.

Current Ratio

Both reported and adjusted current ratios followed a parallel trend pattern. Starting at 2.18 in 2015, the ratio decreased to 1.88 in 2016, indicating a slight deterioration in short-term liquidity. The ratio then modestly improved to 1.91 (reported) and 1.9 (adjusted) in 2017, rising further to 2.01 (reported) and 2.0 (adjusted) in 2018.

However, in 2019, the current ratio declined noticeably to 1.2, indicating a significant reduction in liquidity compared to previous years.

Overall, the data exhibits relative stability in liquidity from 2015 through 2018, with substantial increases in current assets in 2017 and 2018 that supported healthier current ratios. The sudden and pronounced decrease in both current assets and current ratios in 2019 suggests a material change in the company's short-term financial position or asset composition toward the end of the period, potentially impacting its ability to meet short-term obligations.

Net Income Trends

The reported net income attributable to the company exhibits a declining trend from 2015 to 2019. It decreases sharply from 7,685 million US dollars in 2015 to 498 million US dollars in 2019, with a notable low point of 1,460 million in 2017 before a slight recovery in 2018.

The adjusted net income attributable to the company reflects a similar pattern, starting at 7,124 million US dollars in 2015, declining to 498 million US dollars by 2019. Adjusted net income consistently remains slightly below the reported net income, indicating minor adjustments that reduce profitability.

Net Profit Margin Patterns

The reported net profit margin shows a considerable decline over the period, starting at 15.76% in 2015 and dropping to 2.31% in 2019. This margin experiences a significant decrease especially from 2016 (8.97%) to 2017 (2.34%), followed by a tentative increase in 2018 before a further drop in 2019.

The adjusted net profit margin closely follows the reported margin, with values starting at 14.6% in 2015 and falling to 2.31% in 2019. The adjustments slightly lower the margin in each year except 2016, where the adjusted margin is marginally higher, suggesting some adjustment effects on margin computation.

Insights and Observations

The overall trend indicates a significant reduction in both profitability and net income over the five-year period, which could signal challenges in operational efficiency, increased costs, or market pressures affecting earnings.

The relatively small differences between reported and adjusted figures suggest that LIFO reserve adjustments have a limited impact on the company’s net income and profit margins in the given period.

The recovery in net income and profit margin in 2018, though modest, points to possible operational improvements or favorable conditions during that year, yet the subsequent decline in 2019 reaffirms the downward trend in profitability.

The data indicates significant fluctuations in both the asset base and efficiency metrics over the five-year period. Total assets, whether reported or adjusted for the inventory LIFO reserve, show consistent values each year, reflecting accuracy in the reserve adjustments.

Asset Base Trends

Reported total assets exhibited a notable increase from 68,026 million USD in 2015 to a peak of 192,164 million USD in 2017, followed by a marginal decline in 2018 to 188,030 million USD, and a sharp decrease to 69,396 million USD in 2019. Adjusted total assets mirrored these patterns closely, confirming that inventory LIFO reserve adjustments had a minimal impact on total asset valuation over the period.

Total Asset Turnover Trends

Both reported and adjusted total asset turnover ratios decreased overall. The turnover ratio started at 0.72 in 2015, declined to 0.61 in 2016, sharply dropped to 0.33 in 2017, partially recovered to 0.46 in 2018, but then fell again to 0.31 in 2019. This indicates a decline in the efficiency with which the assets were utilized to generate sales or revenues over the period, especially after 2016.

Insights

The sharp rise in total assets in 2017 and 2018 could indicate acquisitions, major capital expenditures, or other balance sheet expansions, which may have adversely affected asset turnover ratios due to integration or underutilization of new assets. The significant asset contraction in 2019 aligns with a further decline in asset turnover, suggesting possible divestitures or asset write-downs that did not improve operating efficiency as measured by turnover ratios.

The financial data over the periods from 2015 to 2019 display notable fluctuations and trends in total assets, stockholders' equity, and financial leverage ratios, both in reported terms and after adjustments for inventory LIFO reserve.

Total Assets

Total assets increased significantly from 2015 to 2017, rising from approximately 68 billion US dollars to over 192 billion US dollars, indicating substantial asset accumulation during this period. In 2018, total assets slightly decreased to about 188 billion US dollars, followed by a sharp decline to approximately 69 billion US dollars in 2019, returning nearly to the 2015 level. The LIFO reserve adjustment had a minimal impact on total assets, as adjusted totals closely track the reported figures throughout.

Stockholders’ Equity

The stockholders’ equity mirrored the trend of total assets, with a pronounced increase from roughly 25 billion US dollars in 2015 to over 100 billion US dollars in 2017. This was followed by a modest reduction in 2018 and a substantial decrease in 2019 to around 41 billion US dollars. Adjusted equity values are marginally higher than reported figures, but the pattern remains consistent, reflecting little effect from inventory accounting adjustments on equity totals.

Financial Leverage

The financial leverage ratio, representing the relationship between total assets and stockholders' equity, shows an initial rising trend from 2.68 in 2015 to 3.06 in 2016. This increase suggests growing leverage and possibly higher reliance on debt financing. Subsequently, the ratio sharply declines to below 2 by 2017 and remains relatively stable around 2 through 2018, before further decreasing to 1.69 in 2019. The parallel behavior of reported and adjusted leverage indicates the LIFO reserve adjustments did not materially affect leverage trends.

Overall, the data reveal a period of rapid asset and equity growth culminating in 2017, succeeded by a significant contraction by 2019. The declining financial leverage from 2016 onwards implies a strategic reduction in debt or changes in capital structure. The consistency between reported and adjusted figures suggests that inventory accounting methods have a minimal influence on the key financial metrics presented.

The data reveals a notable decline in net income attributable to the company over the five-year period. Reported net income peaked at 7,685 million US dollars in 2015, followed by a significant drop to 4,318 million in 2016. This downward trend continued sharply through 2017 to only 1,460 million, with a slight recovery in 2018 reaching 3,844 million before falling again to 498 million in 2019. The adjusted net income figures follow a similar pattern, beginning at 7,124 million in 2015 and declining substantially to 498 million by 2019, with minor fluctuations reflecting a marginal improvement in 2018.

Stockholders’ equity exhibits a different trajectory. Both reported and adjusted equity values remained relatively stable between 2015 and 2016, around 25 billion USD, then sharply increased in 2017, surpassing 100 billion USD. This elevated level persisted through 2018, with minor decreases, then fell drastically in 2019 to approximately 41 billion USD. The close alignment between reported and adjusted equity suggests that inventory LIFO reserve adjustments had a minimal impact on equity valuation.

Return on Equity (ROE) indicators correspond closely with net income trends, starting at a high of over 30% in 2015 reported and adjusted at 28%, then plummeting sharply from 2016 onwards. The figures stabilized at a much lower level by 2017, remaining near or below 4% through to 2019. The adjusted ROE measures are marginally lower or nearly identical to the reported ROE, reinforcing the consistency of LIFO reserve adjustments over the period.

Net Income Trends

Consistent year-over-year decline with minor recovery in 2018 before falling again in 2019.

Stockholders’ Equity Patterns

Substantial increase in 2017 and 2018 followed by a substantial decrease in 2019.

Return on Equity Behavior

Sharp decline from a peak in 2015 to stable but low levels by 2017 through 2019.

Adjustment Effects

Minimal differences between reported and adjusted figures across all metrics suggest limited impact from LIFO reserve adjustments.

Net Income Trends

The reported net income attributable to the company shows a significant decline from 7,685 million USD in 2015 to 498 million USD in 2019. The sharpest decrease occurs between 2016 and 2017, with net income falling from 4,318 million USD to 1,460 million USD. After a partial recovery in 2018 to 3,844 million USD, the figure drops again substantially in 2019, reaching 498 million USD.

The adjusted net income follows a similar pattern, starting at 7,124 million USD in 2015 and ending at 498 million USD in 2019. The adjustment slightly narrows the difference compared to reported figures, particularly noticeable in 2017 and 2018, indicating some impact of inventory LIFO reserve adjustments on net income.

Total Assets Trends

Reported total assets exhibit notable volatility during the period. The values increase from 68,026 million USD in 2015 to a peak of 192,164 million USD in 2017, followed by a slight reduction to 188,030 million USD in 2018, and then a steep decline to 69,396 million USD in 2019. This pattern suggests significant asset revaluations or structural changes affecting the balance sheet.

The adjusted total assets closely mirror the reported figures, with minimal differences across all years. This indicates that LIFO reserve adjustments have little effect on the overall asset base reported in the financial statements.

Return on Assets (ROA) Analysis

Return on assets, both reported and adjusted, declines materially over the period. Reported ROA falls from a robust 11.3% in 2015 to a low of 0.72% in 2019. The most significant drop happens between 2016 (5.43%) and 2017 (0.76%). Adjusted ROA follows the same declining trend but shows slightly lower values in earlier years and a marginally higher value in 2018 compared to reported ROA. This suggests that inventory accounting adjustments slightly affect the profitability measure.

Overall, the decreasing ROA correlates with the diminishing net income and fluctuating asset base, indicating weakening asset profitability throughout the period analyzed.

Summary of Observations

The company experiences a marked decline in profitability measures from 2015 to 2019. Net income substantially decreases, with a partial rebound in 2018 before a further drop. Total assets surge significantly in 2017 before contracting sharply by 2019, reflecting possible major transactions or restructuring events. The stability between reported and adjusted asset values suggests limited impact from LIFO reserve adjustments on asset figures, though profit-related measures show some sensitivity. The declining return on assets highlights deteriorating efficiency in utilizing assets to generate earnings.