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Novell Inc (NAS:NOVL)
Cost of Goods Sold
\$171.44 Mil (TTM As of Jan. 2011)

Novell Inc's cost of goods sold for the three months ended in Jan. 2011 was \$41.55 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Jan. 2011 was \$171.44 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Novell Inc's Gross Margin for the three months ended in Jan. 2011 was 78.21%.

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.

Novell Inc Cost of Goods Sold for the trailing twelve months (TTM) ended in Jan. 2011 was 41.312 (Apr. 2010 ) + 43.507 (Jul. 2010 ) + 45.068 (Oct. 2010 ) + 41.549 (Jan. 2011 ) = \$171.44 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.

Novell Inc's Gross Margin for the three months ended in Jan. 2011 is calculated as:

 Gross Margin = (Revenue - Cost of Goods Sold) / Revenue = (190.714 - 41.549) / 190.714 = 78.21 %

* 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:

Novell Inc's Inventory Turnover for the three months ended in Jan. 2011 is calculated as:

 Inventory Turnover = Cost of Goods Sold / Average Inventory = 41.549 / 0 = N/A

* 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

Historical Data

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

Novell Inc Annual Data

 Oct01 Oct02 Oct03 Oct04 Oct05 Oct06 Oct07 Oct08 Oct09 Oct10 COGS 327.94 449.42 438.72 415.68 443.12 320.09 260.25 237.62 186.83 173.61

Novell Inc Quarterly Data

 Oct08 Jan09 Apr09 Jul09 Oct09 Jan10 Apr10 Jul10 Oct10 Jan11 COGS 57.85 46.90 45.28 46.98 47.67 43.72 41.31 43.51 45.07 41.55
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