Inventory leaves the balance-sheet and becomes cost-of-goods-sold only when the item sells. Until then, production costs are capitalised on the balance sheet, which means a company building unsold stock reports better margins than its cash flow deserves.
The three buckets are disclosed in the footnotes. Finished goods rising much faster than revenue is the classic early warning of a demand slowdown or a coming discount cycle.
Example: Northwind Tools carries $265M of inventory: $78M raw materials, $41M work in progress and $146M finished goods. Finished goods rose 26% while revenue rose 8%, which is worth a question on the earnings-call.
Related: inventory-costing, cost-of-goods-sold, days-inventory-outstanding, working-capital, earnings-quality