Johnson & Johnson (NYSE:JNJ)

The composition of inventories exhibits fluctuating trends over the five-year period. Overall inventory values increased from 2021 to 2025, though not consistently year-over-year. A closer examination of the individual components reveals differing patterns.

Raw Materials and Supplies

Raw materials and supplies demonstrate a general upward trend, increasing from US$1,592 million in 2021 to US$2,530 million in 2025. However, a slight decrease is noted between 2022 and 2023, followed by a further minor decrease between 2023 and 2024 before resuming growth in 2025. This suggests potential fluctuations in procurement strategies or supply chain dynamics.

Goods in Process

Goods in process experienced a significant decrease from 2021 to 2022, falling from US$2,287 million to US$1,700 million. This was followed by a moderate increase in 2023, and a substantial increase in 2024 to US$2,815 million, continuing to rise sharply to US$3,828 million in 2025. This pattern indicates potential shifts in production levels or manufacturing efficiency, with a notable acceleration in work-in-progress in the later years of the period.

Finished Goods

Finished goods inventory increased considerably from 2021 to 2022, rising from US$6,508 million to US$8,713 million. A subsequent decrease occurred in 2023, down to US$6,874 million, followed by moderate increases in both 2024 and 2025, reaching US$7,833 million. This suggests potential adjustments in sales volume or distribution strategies, with a stabilization in finished goods levels towards the end of the period.

Total Inventories

Total inventories mirrored the combined trends of its components. An increase from US$10,387 million in 2021 to US$12,483 million in 2022 was followed by a decrease to US$11,181 million in 2023. A subsequent increase to US$12,444 million in 2024, and a further increase to US$14,191 million in 2025, indicates overall inventory investment is growing, driven primarily by increases in goods in process and finished goods in the final two years. The overall trend suggests a growing inventory position, despite a mid-period dip.

The observed fluctuations across inventory categories warrant further investigation to understand the underlying operational and market factors driving these changes. The significant increase in goods in process and finished goods in the most recent years may indicate increased production or anticipated demand, but could also signal potential inefficiencies or overstocking.