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Tesco PLC (OTCPK:TSCDY)
Cost of Goods Sold
$98,915 Mil (TTM As of Feb. 2014)

Tesco PLC's cost of goods sold for the six months ended in Feb. 2014 was $49,792 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Feb. 2014 was $98,915 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Tesco PLC's Gross Margin for the six months ended in Feb. 2014 was 5.27%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Tesco PLC's Inventory Turnover for the six months ended in Feb. 2014 was 8.38.


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. Tesco PLC Cost of Goods Sold for the trailing twelve months (TTM) ended in Feb. 2014 was $98,915 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.

Tesco PLC's Gross Margin for the six months ended in Feb. 2014 is calculated as:

Gross Margin=(Revenue - Cost of Goods Sold) / Revenue
=(52563.1229236 - 49792.358804) / 52563.1229236
=5.27 %

* 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:

Tesco PLC's Inventory Turnover for the six months ended in Feb. 2014 is calculated as:

Inventory Turnover=Cost of Goods Sold / Average Inventory
=49792.358804 / 5940.19933555
=8.38

* 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.

Tesco PLC Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
COGS 59,48863,57176,65687,33670,41578,77089,38693,79491,60998,915

Tesco PLC Semi-Annual Data

Aug09Feb10Aug10Feb11Aug11Feb12Aug12Feb13Aug13Feb14
COGS 41,98040,01442,40145,47846,27847,37048,44446,30847,01449,792
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