Analysis of Inventory
Inventory Disclosure
EMC Corp., balance sheet: inventory
US$ in millions
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Work-in-process | 592) | 627) | 696) | 606) | 492) | ||||||
| Finished goods | 653) | 649) | 638) | 595) | 518) | ||||||
| Inventories | 1,245) | 1,276) | 1,334) | 1,201) | 1,010) |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
Total inventory levels experienced a period of growth between 2011 and 2013, followed by a gradual contraction through 2015. This overall trajectory indicates a peak in inventory investment in 2013, after which the company shifted toward a leaner inventory position.
- Total Inventory Trends
- Inventories rose from 1,010 million USD in 2011 to a peak of 1,334 million USD in 2013, an increase of approximately 32%. From 2013 to 2015, total inventories decreased to 1,245 million USD, suggesting a correction in inventory levels or improved inventory management efficiency.
- Work-in-Process (WIP) Analysis
- The value of work-in-process inventory mirrored the total inventory trend, increasing from 492 million USD in 2011 to a high of 696 million USD in 2013. A subsequent decline occurred over the following two years, with the balance falling to 592 million USD by the end of 2015.
- Finished Goods Progression
- Unlike total inventory and WIP, finished goods exhibited a continuous upward trend throughout the entire period. Values increased steadily from 518 million USD in 2011 to 653 million USD in 2015, indicating a persistent accumulation of completed products available for sale.
- Inventory Composition Shift
- A structural shift in inventory composition is evident. In 2011, work-in-process and finished goods were nearly balanced. By 2015, finished goods constituted a larger proportion of the total inventory than work-in-process, signaling a transition toward holding more completed stock relative to goods currently in the production phase.
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