Analysis of Inventory
Inventory Disclosure
National Oilwell Varco Inc., balance sheet: inventory
US$ in millions
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 net inventories experienced a significant increase between 2011 and 2012, rising from US$ 4,030 million to a peak of US$ 5,891 million. Following this peak, a consistent downward trajectory was observed through 2015, with total inventory levels declining to US$ 4,678 million.
- Raw Materials and Supplies
- Inventory levels for raw materials rose from US$ 907 million in 2011 to US$ 1,268 million in 2012. After remaining relatively stable between 2013 and 2014, a reduction to US$ 1,069 million was recorded by the end of 2015.
- Work in Process
- This segment exhibited notable volatility, increasing to a peak of US$ 1,027 million in 2014 before experiencing a sharp decline to US$ 632 million in 2015, the lowest level observed during the five-year period.
- Finished Goods and Purchased Products
- As the largest component of the inventory portfolio, this category saw a substantial increase from US$ 2,271 million in 2011 to US$ 3,718 million in 2012. A steady decline followed over the subsequent three years, concluding at US$ 2,977 million in 2015.
The data indicates a period of rapid inventory accumulation that peaked in 2012, followed by a multi-year phase of contraction. The simultaneous reduction in raw materials, work in process, and finished goods by 2015 suggests a strategic reduction in overall stock levels or a response to decelerating demand.
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