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Helmerich & Payne, Inc. (NYSE:HP)
Cost of Goods Sold
$1,860 Mil (TTM As of Dec. 2013)

Helmerich & Payne, Inc.'s cost of goods sold for the three months ended in Dec. 2013 was $474 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Dec. 2013 was $1,860 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Helmerich & Payne, Inc.'s Gross Margin for the three months ended in Dec. 2013 was 46.69%.

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.

Helmerich & Payne, Inc. Cost of Goods Sold for the trailing twelve months (TTM) ended in Dec. 2013 was 461.737 (Mar. 2013 ) + 450.99 (Jun. 2013 ) + 473.17 (Sep. 2013 ) + 474.048 (Dec. 2013 ) = $1,860 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

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

Helmerich & Payne, Inc.'s Gross Margin for the three months ended in Dec. 2013 is calculated as:

Gross Margin=(Revenue - Cost of Goods Sold) / Revenue
=(889.152 - 474.048) / 889.152
=46.69 %

* All numbers are in millions except for per share data and ratio. All numbers are in their own 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:

Helmerich & Payne, Inc.'s Inventory Turnover for the three months ended in Dec. 2013 is calculated as:

* All numbers are in millions except for per share data and ratio. All numbers are in their own 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 own currency.

Helmerich & Payne, Inc. Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
COGS 4184846628621,0879451,0721,4331,7511,853

Helmerich & Payne, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
COGS 397391448464447467462451473474
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