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PSS World Medical, Inc. (NAS:PSSI)
Cost of Goods Sold
$1,428 Mil (TTM As of Sep. 2012)

PSS World Medical, Inc.'s cost of goods sold for the six months ended in Sep. 2012 was $279 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Sep. 2012 was $1,428 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. PSS World Medical, Inc.'s Gross Margin for the six months ended in Sep. 2012 was 33.79%.

Cost of Goods Sold is also directly linked to Inventory Turnover. PSS World Medical, Inc.'s Inventory Turnover for the six months ended in Sep. 2012 was 1.64.


Definition

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

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. PSS World Medical, Inc. Cost of Goods Sold for the trailing twelve months (TTM) ended in Sep. 2012 was $1,428 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.

PSS World Medical, Inc.'s Gross Margin for the six months ended in Sep. 2012 is calculated as:

Gross Margin=(Revenue - Cost of Goods Sold) / Revenue
=(420.798 - 278.622) / 420.798
=33.79 %

* 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:

PSS World Medical, Inc.'s Inventory Turnover for the six months ended in Sep. 2012 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.

PSS World Medical, Inc. Annual Data

Mar03Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12
COGS 8429651,0501,1521,2421,3141,3711,4271,3991,428

PSS World Medical, Inc. Semi-Annual Data

Jun10Sep10Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12
COGS 331339352377353355357363273279
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