Switch to:
GuruFocus has detected 4 Warning Signs with Brocade Communications Systems Inc $BRCD.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Brocade Communications Systems Inc (NAS:BRCD)
Cost of Goods Sold
$829 Mil (TTM As of Oct. 2016)

Brocade Communications Systems Inc's cost of goods sold for the three months ended in Oct. 2016 was $237 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Oct. 2016 was $829 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Brocade Communications Systems Inc's Gross Margin for the three months ended in Oct. 2016 was 63.95%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Brocade Communications Systems Inc's Inventory Turnover for the three months ended in Oct. 2016 was 3.15.


Definition

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

Brocade Communications Systems Inc Cost of Goods Sold for the trailing twelve months (TTM) ended in Oct. 2016 was 185.469 (Jan. 2016 ) + 172.995 (Apr. 2016 ) + 233.822 (Jul. 2016 ) + 236.985 (Oct. 2016 ) = $829 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.

Brocade Communications Systems Inc's Gross Margin for the three months ended in Oct. 2016 is calculated as:

Gross Margin=(Revenue - Cost of Goods Sold) / Revenue
=(657.299 - 236.985) / 657.299
=63.95 %

* 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:

Brocade Communications Systems Inc's Inventory Turnover for the three months ended in Oct. 2016 is calculated as:

* 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

Inventory, Inventory Turnover, Gross Margin, Revenue


Historical Data

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

Brocade Communications Systems Inc Annual Data

Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14Oct15Oct16
COGS 575607919860864855814745735829

Brocade Communications Systems Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
COGS 187187174180195185173234237214
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK