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Spartech Corporation (NYSE:SEH)
Cost of Goods Sold
\$1,038 Mil (TTM As of Oct. 2012)

Spartech Corporation's cost of goods sold for the three months ended in Oct. 2012 was \$254 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Oct. 2012 was \$1,038 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Spartech Corporation's Gross Margin for the three months ended in Oct. 2012 was 11.41%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Spartech Corporation's Inventory Turnover for the three months ended in Oct. 2012 was 2.50.

Definition

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

Spartech Corporation Cost of Goods Sold for the trailing twelve months (TTM) ended in Oct. 2012 was 260.109 (Jan. 2012 ) + 268.5 (Apr. 2012 ) + 255.315 (Jul. 2012 ) + 254.067 (Oct. 2012 ) = \$1,038 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.

Spartech Corporation's Gross Margin for the three months ended in Oct. 2012 is calculated as:

 Gross Margin = (Revenue - Cost of Goods Sold) / Revenue = (286.804 - 254.067) / 286.804 = 11.41 %

* 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:

Spartech Corporation's Inventory Turnover for the three months ended in Oct. 2012 is calculated as:

 Inventory Turnover = Cost of Goods Sold / Average Inventory = 254.067 / 101.6735 = 2.50

* 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.

Spartech Corporation Annual Data

 Oct03 Oct04 Oct05 Oct06 Oct07 Oct08 Oct09 Oct10 Oct11 Oct12 COGS 822 967 1,244 1,309 1,288 1,273 810 914 1,005 1,038

Spartech Corporation Quarterly Data

 Jul10 Oct10 Jan11 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 COGS 242 237 216 255 265 268 260 269 255 254
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