Photographer: Pau Barrena/Bloomberg

One Tiny Number Can Reveal Big Problems at a Global Smartphone Maker

Steve Jobs learned in 1997 what HTC is facing today: Too many products sitting in warehouses can mean big trouble

Tucked away in a corporate earnings report—past the data on profit margins and revenue growth, hidden deep inside a balance sheet—is a number that can tell you a lot about a mobile phone maker's health. In the global smartphone war, brands are routinely measured by market share, revenue, profit, and the coolness of their ads. But one line item called finished goods inventory, which refers to the percentage of materials that were manufactured into phones but went unsold, can give insight into whether a company's fortunes are changing.

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