The inventory assets of Samsung Electronics and LG Electronics (Inventory Assets) increased in the third quarter because they increased raw material procurement to prevent supply chain risks. And amid the ongoing recession, global demand for its products has yet to recover.
Samsung Electronics' inventory assets totaled more than 57 trillion won (about 302.1 billion yuan) in the third quarter, a year-on-year increase of 51.6%. Since the outbreak of the epidemic, its inventory assets have continued to increase. Specifically, the figure is about 6.9 trillion won in the third quarter of 2019, 5.8 trillion won in the fourth quarter of 2019, 32 trillion won in the fourth quarter of 2020, and 41 trillion won in the fourth quarter of 2021 won.
In the third quarter, LG Electronics' inventory assets rose 12.5 percent year-on-year to 11.2 trillion won. LG's inventory assets were less than 5.9 trillion won at the end of 2019 but increased to 7.4 trillion won and 9.7 trillion won at the end of 2020 and 2021, respectively.
Inventory turnover ratio: Samsung Electronics' inventory turnover ratio dropped from 4.6 to 3.8, and LG Electronics' inventory turnover ratio dropped from 6.1 to 5.8, which means that their products sold less in the third quarter of this year compared to the same period last year.
Note:
Inventory assets refer to the assets reserved for sale or consumption during the production and operation process of the enterprise. Inventory assets include raw materials, fuels, work in progress, self-made semi-finished products, finished products, low-value consumables, packaging materials, spare parts for repairs, purchased goods, etc. Inventory turnover is the number of times inventory is turned over within a certain period of time. It is an indicator that reflects the speed of inventory turnover. A higher turnover ratio indicates better sales.
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