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Titanium Metals Corporation (NYSE:TIE)
Cost of Goods Sold
\$822 Mil (TTM As of Sep. 2012)

Titanium Metals Corporation's cost of goods sold for the six months ended in Sep. 2012 was \$207 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Sep. 2012 was \$822 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Titanium Metals Corporation's Gross Margin for the six months ended in Sep. 2012 was 19.52%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Titanium Metals Corporation's Inventory Turnover for the six months ended in Sep. 2012 was 0.25.

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. Titanium Metals Corporation Cost of Goods Sold for the trailing twelve months (TTM) ended in Sep. 2012 was \$822 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.

Titanium Metals Corporation's Gross Margin for the six months ended in Sep. 2012 is calculated as:

 Gross Margin = (Revenue - Cost of Goods Sold) / Revenue = (257.7 - 207.4) / 257.7 = 19.52 %

* 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:

Titanium Metals Corporation's Inventory Turnover for the six months ended in Sep. 2012 is calculated as:

 Inventory Turnover = Cost of Goods Sold / Average Inventory = 207.4 / 819.25 = 0.25

* 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.

Titanium Metals Corporation Annual Data

 Dec02 Dec03 Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 COGS 370 368 446 550 747 832 864 661 678 822

Titanium Metals Corporation Semi-Annual Data

 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 COGS 171 161 167 204 209 207 201 218 221 207
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