Risk of Excess and Slow-Moving Inventory Associated with Make-to-Stock Production
First written in FY2016. 9 of 22 entries say "Restated". Latest entry: FY2026.
Daiichi Kigenso Kagaku-Kogyo moved to the "Worse" side of this theme in 2026, 4 years after the typical company in this theme (2022).
The whole theme swung hardest in 2022: 14 of 43 companies on the "Worse" side.
17 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「Inventories have increased, and reducing them remains an important issue.」
Inventories increased by ¥2,037 million from the end of the previous fiscal year, including increases of ¥1,532 million in finished products and ¥920 million in work in process. Although high-value inventory has been eliminated and cost reductions have progressed, inventory reduction across the consolidated group was again identified as an ongoing issue. - 2026-05-14WorsenedEarnings
「これは主に、現金及び預金の増加（2,218百万円）、製品の増加（1,532百万円）、仕掛品の増加（920百万円）、有形固定資産の減少（2,030百万円）によるものです。」
製品と仕掛品が増加し、棚卸資産全体では2,037百万円の増加となった。 - FY2026-H1WorsenedAnnual report
「Cash provided by operating activities during the current interim consolidated accounting period was ¥1,041 million (compared with cash used of ¥1,220 million in the same period of the previous year). This was mainly due to an increase in inventories of ¥1,829 million, an increase in accounts payable of ¥634 million, interim profit before income taxes and other adjustments of ¥356 million, and depreciation and amortization of ¥1,625 million.」
This marked a change from the explanation that the inventory balance had declined at the end of the previous fiscal year, with inventories increasing by ¥1,829 million during the current interim consolidated accounting period. Operating cash flow was an inflow of ¥1,041 million. - FY2025MitigatedAnnual report
「At the end of the current consolidated fiscal year, cash and deposits increased, mainly due to the recognition of subsidy income and a decrease in raw-material purchases accompanying inventory reductions. In addition, balances of trade receivables and inventories decreased as a result of lower sales.」
Regarding the coexistence of high-value inventory and an increase in consolidated inventories during the previous interim period, the company reported the elimination of high-value inventory and a decrease in the inventory balance at fiscal year-end. - FY2025-H1Elimination of high-value inventory coincided with an increase in total inventoriesAnnual report
「Cash used in operating activities during the current interim consolidated accounting period was ¥1,220 million (compared with cash provided of ¥3,281 million in the same period of the previous year). This was mainly due to an increase in inventories of ¥2,168 million and depreciation and amortization of ¥1,731 million.」
While the sales subsidiary explained that high-value inventory affected by raw-material market conditions and other factors had been eliminated, consolidated inventories increased by ¥2,168 million overall, and operating cash flow was an outflow of ¥1,220 million. - FY2024Detailed measures to reduce inventoriesAnnual report
「We will reduce inventories by reviewing the number of product types and lot sizes and shortening lead times. In addition, while promoting innovation and improvements in production processes to reduce costs, we will work to improve operational efficiency through the use of IT systems and other measures and to optimize receivables and payables.」
The company specified reviews of the number of product types, lot sizes and lead times, the use of IT, and optimization of receivables and payables as measures to address risks associated with make-to-stock production and inventory holdings. - FY2022MitigatedAnnual report
「Inventory write-downs due to declining profitability of inventories held for ordinary sale (net of reversals) -¥77,717 thousand」
Following net inventory write-back gains of ¥207 million in the previous fiscal year, the current fiscal year also saw net write-back gains of ¥77.7 million. - FY2021MitigatedAnnual report
「Inventory write-downs due to declining profitability of inventories held for ordinary sale (net of reversals) -¥207,604 thousand」
Inventory write-downs due to declining profitability shifted from ¥124 million in the previous fiscal year to net reversals of ¥207 million in the current fiscal year. - FY2020WorsenedAnnual report
「Inventory write-downs due to declining profitability of inventories held for ordinary sale (net of reversals) ¥124,329 thousand」
Regarding inventory risks associated with make-to-stock production and other factors, inventory write-downs amounted to ¥124 million, up from ¥96 million in the previous fiscal year. - FY2020-Q3RestatedAnnual report
「During the cumulative third quarter of the fiscal year under review, there were no newly arising business or other risks. There were also no material changes to the business or other risks described in the annual securities report for the previous fiscal year.」
The company disclosed that there were no new occurrences or material changes in the risks associated with its existing businesses, including excess and stagnant inventory arising from make-to-stock production. - FY2020-Q2RestatedAnnual report
「No new business or other risks arose during the 2nd quarter cumulative period. There were also no material changes to the business and other risks described in the securities report for the previous fiscal year.」
The company disclosed that there were no new occurrences or material changes in the risks associated with its existing businesses, including excess and stagnant inventory arising from make-to-stock production. - FY2020-Q1RestatedAnnual report
「No new business or other risks arose during the 1st quarter cumulative period. There were also no material changes to the risks described in the securities report for the previous fiscal year.」
The company disclosed that there were no new occurrences or material changes in the risks associated with its existing businesses, including excess and stagnant inventory arising from make-to-stock production. - FY2019MaterialisedAnnual report
「Write-down of inventories held for ordinary sales purposes due to reduced profitability, net of reversals: ¥96 million」
Regarding inventory risks associated with production based on forecast demand, a ¥96 million write-down of inventories occurred. This was down from ¥265 million in the previous fiscal year. - FY2019-Q3RestatedAnnual report
「During the cumulative third quarter of the fiscal year under review, there were no newly arising business or other risks. There were also no material changes to the business or other risks described in the annual securities report for the previous fiscal year.」
The Company has disclosed that there have been no new developments or material changes regarding its existing business and other risks, including the risk of excess and slow-moving inventory from production based on forecast demand. - FY2019-Q2RestatedAnnual report
「No new business or other risks arose during the 2nd quarter cumulative period. There were also no material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company has disclosed that there have been no new developments or material changes regarding its existing business and other risks, including the risk of excess and slow-moving inventory from production based on forecast demand. - FY2018MaterialisedAnnual report
「Write-down of inventories held for ordinary sales purposes due to reduced profitability, net of reversals: ¥265 million」
Regarding the risk of excess and slow-moving inventory from production based on forecast demand, a ¥265 million write-down of inventories due to reduced profitability occurred. This was up from ¥39 million in the previous fiscal year. - FY2018-Q3RestatedAnnual report
「During the cumulative third quarter of the fiscal year under review, there were no newly arising business or other risks. There were also no material changes to the business or other risks described in the annual securities report for the previous fiscal year.」
The Company has disclosed that there have been no new developments or material changes regarding its existing business and other risks, including the risk of excess and slow-moving inventory from production based on forecast demand. - FY2018-Q2RestatedAnnual report
「No new business or other risks arose during the 2nd quarter cumulative period. There were also no material changes to the business and other risks described in the securities report for the previous fiscal year.」
The Company has disclosed that there have been no new developments or material changes regarding its existing business and other risks, including the risk of excess and slow-moving inventory from production based on forecast demand. - FY2018-Q1RestatedAnnual report
「No new business or other risks arose during the 1st quarter cumulative period. There were also no material changes to the risks described in the securities report for the previous fiscal year.」
The Company has disclosed that there have been no new developments or material changes regarding the risk of excess and slow-moving inventory from production based on forecast demand. - FY2017MaterialisedAnnual report
「Write-down of inventories held for ordinary sales purposes due to reduced profitability, net of reversals: ¥39 million」
Regarding inventory risks associated with production based on forecast demand, the Company disclosed that a ¥39 million write-down of inventories due to reduced profitability occurred during the current consolidated fiscal year. - FY2017-Q3RestatedAnnual report
「During the cumulative third quarter of the fiscal year under review, there were no newly arising business or other risks. There were also no material changes to the business or other risks described in the annual securities report for the previous fiscal year.」
The Company has disclosed in aggregate that there have been no new developments or material changes regarding the risk of excess and slow-moving inventory from production based on forecast demand. - FY2016First statedAnnual report
「The Company may produce based on anticipated orders determined by its own judgment after considering customer forecasts of expected consumption and market trends, rather than formal orders from customers.」
Production based on forecast demand to accommodate short lead times could result in differences from formal orders, leading to excess inventory, inventory valuation losses or disposal losses.