Analysis of Inventory
Inventory Disclosure
Lockheed Martin Corp., balance sheet: inventory
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
Overall, inventories exhibited a general increasing trend from 2021 to 2025. However, the composition of these inventories reveals differing patterns across the three primary categories: materials, work-in-process, and finished goods. The most substantial component, work-in-process, consistently represents the largest portion of total inventories and demonstrates the most significant growth.
- Materials, Spares and Supplies
- This inventory component remained relatively stable between 2021 and 2023, fluctuating between US$599 million and US$624 million. A moderate increase was observed in 2024, reaching US$661 million, followed by a slight decrease to US$659 million in 2025. The overall change from 2021 to 2025 was minimal.
- Work-in-Process
- Work-in-process inventories showed a consistent upward trend throughout the period. Beginning at US$2,163 million in 2021, it increased to US$2,667 million in 2025, representing a cumulative increase of approximately 23.3%. The growth rate appeared to accelerate between 2022 and 2024.
- Finished Goods
- Finished goods inventories were the smallest component and exhibited the most stable pattern. Values remained consistently below US$200 million throughout the period, with a slight increase from US$194 million in 2021 to US$198 million in 2025. Fluctuations were minimal.
- Total Inventories
- Total inventories increased from US$2,981 million in 2021 to US$3,524 million in 2025, representing an overall increase of approximately 18.2%. The largest single-year increase occurred between 2023 and 2024, with a rise of US$342 million. The growth in total inventories closely mirrors the trend observed in work-in-process inventories, indicating that changes in work-in-process are the primary driver of overall inventory fluctuations.
The sustained growth in work-in-process inventories warrants further investigation. Potential explanations include increased production volume, longer production cycles, or inefficiencies in the production process. The stability of finished goods suggests effective inventory management in this area, while the relatively constant level of materials and spares indicates consistent procurement practices.