Analysis of Inventory
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Inventory Disclosure
International Business Machines Corp., balance sheet: inventory
US$ in millions
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Finished goods | |||||||||||
| Work in process and raw materials | |||||||||||
| Inventory |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Inventory Trend
- The total inventory decreased steadily from US$1,839 million in 2020 to US$1,161 million in 2023, before showing a moderate increase to US$1,289 million in 2024. This indicates an overall trend of inventory reduction over the five-year period, with a slight recovery in the most recent year.
- Finished Goods
- Finished goods inventory experienced a decline from US$190 million in 2020 to US$78 million in 2023, representing a sharp decrease over three years. However, in 2024, finished goods rebounded to US$134 million, suggesting a restocking or possibly increased production towards the end of the period.
- Work in Process and Raw Materials
- Work in process and raw materials inventory showed a downward trend from US$1,649 million in 2020 to US$1,083 million in 2023, reflecting a significant reduction in raw material and work-in-process stocks. Similar to finished goods, there was an increase in 2024 to US$1,155 million, indicating potential preparation for higher production or improved supply chain management.
- Overall Insights
- Across the five years, the significant reductions in both finished goods and work-in-process/raw materials inventories suggest efforts to optimize inventory levels, likely to improve operational efficiency or reduce holding costs. The uptick in 2024 in all categories might indicate a strategic shift to rebuild inventory, possibly to meet anticipated demand increases or stabilize supply chains.