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GuruFocus has detected 4 Warning Signs with Apollo Education Group Inc \$APOL.
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Apollo Education Group Inc (NAS:APOL)
Cost of Goods Sold
\$1,055 Mil (TTM As of Nov. 2016)

Apollo Education Group Inc's cost of goods sold for the three months ended in Nov. 2016 was \$249 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Nov. 2016 was \$1,055 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Apollo Education Group Inc's Gross Margin for the three months ended in Nov. 2016 was 48.66%.

Cost of Goods Sold is also directly linked to Inventory Turnover.

Definition

Cost of goods sold (COGS) refers to the Inventory costs of those goods a business has sold during a particular period.

Apollo Education Group Inc Cost of Goods Sold for the trailing twelve months (TTM) ended in Nov. 2016 was 270.64 (Feb. 2016 ) + 274.486 (May. 2016 ) + 260.702 (Aug. 2016 ) + 248.753 (Nov. 2016 ) = \$1,055 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Explanation

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin.

Apollo Education Group Inc's Gross Margin for the three months ended in Nov. 2016 is calculated as:

 Gross Margin = (Revenue - Cost of Goods Sold) / Revenue = (484.499 - 248.753) / 484.499 = 48.66 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

A company that has a moat can usually maintain or even expand their Gross Margin. A company can increase its Gross Margin in two ways. It can increase the prices of the goods it sells and keeps its Cost of Goods Sold unchanged. Or it can keep the sales price unchanged and squeeze its suppliers to reduce the Cost of Goods Sold. Warren Buffett believes businesses with the power to raise prices have moats.

Cost of Goods Sold is also directly linked to another concept called Inventory Turnover:

Apollo Education Group Inc's Inventory Turnover for the three months ended in Nov. 2016 is calculated as:

 Inventory Turnover = Cost of Goods Sold / Average Inventory = 248.753 / 0 = N/A

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Inventory Turnover measures how fast the company turns over its inventory within a year. A higher inventory turnover means the company has light inventory. Therefore the company spends less money on storage, write downs, and obsolete inventory. If the inventory is too light, it may affect sales because the company may not have enough to meet demand.

Usually retailers pile up their inventories at holiday seasons to meet the stronger demand. Therefore, the inventory of a particular quarter of a year should not be used to calculate inventory turnover. An average inventory is a better indication.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Apollo Education Group Inc Annual Data

 Aug07 Aug08 Aug09 Aug10 Aug11 Aug12 Aug13 Aug14 Aug15 Aug16 COGS 1,237 1,371 1,568 1,733 1,760 1,777 1,543 1,283 1,208 1,097

Apollo Education Group Inc Quarterly Data

 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 COGS 305 322 291 295 300 291 271 274 261 249
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