Switch to:
Pharmaceutical Product Development Inc (NAS:PPDI)
Cost of Goods Sold
\$850.06 Mil (TTM As of Sep. 2011)

Pharmaceutical Product Development Inc's cost of goods sold for the three months ended in Sep. 2011 was \$223.51 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Sep. 2011 was \$850.06 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Pharmaceutical Product Development Inc's Gross Margin for the three months ended in Sep. 2011 was 46.19%.

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.

Pharmaceutical Product Development Inc Cost of Goods Sold for the trailing twelve months (TTM) ended in Sep. 2011 was 198.344 (Dec. 2010 ) + 206.823 (Mar. 2011 ) + 221.39 (Jun. 2011 ) + 223.507 (Sep. 2011 ) = \$850.06 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.

Pharmaceutical Product Development Inc's Gross Margin for the three months ended in Sep. 2011 is calculated as:

 Gross Margin = (Revenue - Cost of Goods Sold) / Revenue = (415.395 - 223.507) / 415.395 = 46.19 %

* 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:

Pharmaceutical Product Development Inc's Inventory Turnover for the three months ended in Sep. 2011 is calculated as:

 Inventory Turnover = Cost of Goods Sold / Average Inventory = 223.507 / 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.

Pharmaceutical Product Development Inc Annual Data

 Dec01 Dec02 Dec03 Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 COGS 207.87 315.01 382.17 449.25 543.29 670.53 771.60 817.70 731.76 763.29

Pharmaceutical Product Development Inc Quarterly Data

 Jun09 Sep09 Dec09 Mar10 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 COGS 183.26 175.02 184.83 182.80 192.17 189.98 198.34 206.82 221.39 223.51
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)