Switch to:
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Richardson Electronics Ltd (NAS:RELL)
Cost of Goods Sold
\$93.8 Mil (TTM As of Feb. 2017)

Richardson Electronics Ltd's cost of goods sold for the three months ended in Feb. 2017 was \$21.6 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Feb. 2017 was \$93.8 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Richardson Electronics Ltd's Gross Margin for the three months ended in Feb. 2017 was 33.09%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Richardson Electronics Ltd's Inventory Turnover for the three months ended in Feb. 2017 was 0.50.

Definition

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

Richardson Electronics Ltd Cost of Goods Sold for the trailing twelve months (TTM) ended in Feb. 2017 was 26.18 (May. 2016 ) + 23.133 (Aug. 2016 ) + 22.863 (Nov. 2016 ) + 21.621 (Feb. 2017 ) = \$93.8 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.

Richardson Electronics Ltd's Gross Margin for the three months ended in Feb. 2017 is calculated as:

 Gross Margin = (Revenue - Cost of Goods Sold) / Revenue = (32.313 - 21.621) / 32.313 = 33.09 %

* 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:

Richardson Electronics Ltd's Inventory Turnover for the three months ended in Feb. 2017 is calculated as:

 Inventory Turnover = Cost of Goods Sold / Average Inventory = 21.621 / 42.969 = 0.50

* 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

Historical Data

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

Richardson Electronics Ltd Annual Data

 May07 May08 May09 May10 May11 May12 May13 May14 May15 May16 COGS 424.9 432.8 386.7 94.1 112.8 111.1 99.5 96.9 95.8 97.2

Richardson Electronics Ltd Quarterly Data

 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 COGS 23.4 23.7 24.7 25.8 23.7 21.5 26.2 23.1 22.9 21.6
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)