Analysis of Inventory
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- Income Statement
- Statement of Comprehensive Income
- Common-Size Income Statement
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Present Value of Free Cash Flow to Equity (FCFE)
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
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Inventory Disclosure
Emerson Electric Co., balance sheet: inventory
US$ in millions
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Finished products | |||||||||||||
| Raw materials and work in process | |||||||||||||
| Inventories |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
Analysis of the annual financial data reveals notable fluctuations in the inventory components over the six-year period ending in 2019. The trend in finished products demonstrates variability, with a significant decline observed between 2014 and 2016, followed by a recovery through 2018, and a slight decrease again in 2019.
- Finished Products
- The value of finished products decreased substantially from 741 million USD in 2014 to 382 million USD in 2016, reflecting a reduction of approximately 48% over two years. Subsequently, there was a rebound to 592 million USD in 2018, representing an increase of over 55% from the 2016 low. However, the value slightly decreased to 578 million USD in 2019, indicating some stabilization but still below the 2014 level.
- Raw Materials and Work in Process
- Raw materials and work in process inventory exhibited a relatively more stable but upward trend from 2016 onward. The values fell from 1,316 million USD in 2014 to 826 million USD in 2016, marking a significant reduction of about 37%. From 2016 to 2019, these inventories increased steadily to 1,302 million USD, nearly returning to the 2014 level. This pattern suggests an initial drawdown followed by rebuilding of raw materials and work in process inventories.
- Total Inventories
- Total inventories mirrored the fluctuations seen in the individual components, demonstrating a pronounced dip in 2016 to 1,208 million USD from 2,057 million USD in 2014. This represents a decline of around 41%. From 2016 onwards, total inventories rose consistently, reaching 1,880 million USD in 2019, which is approximately 9% lower than the 2014 figure but indicates a recovery trend.
Overall, the data indicates a period of inventory reduction from 2014 to 2016, which may reflect strategic inventory management, operational adjustments, or market conditions impacting stock levels. The subsequent recovery from 2016 to 2019 implies a rebuilding phase, potentially in response to increased demand or changes in production planning. The relatively greater volatility in finished products compared to raw materials and work in process suggests different dynamics affecting these inventory categories.