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Tesco PLC (OTCPK:TSCDY)
Cost of Goods Sold
\$73,684 Mil (TTM As of Aug. 2016)

Tesco PLC's cost of goods sold for the six months ended in Aug. 2016 was \$34,069 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Aug. 2016 was \$73,684 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 Aug. 2016 was 4.91%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Tesco PLC's Inventory Turnover for the six months ended in Aug. 2016 was 10.09.

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 Aug. 2016 was \$73,684 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.

Tesco PLC's Gross Margin for the six months ended in Aug. 2016 is calculated as:

 Gross Margin = (Revenue - Cost of Goods Sold) / Revenue = (35829.6199214 - 34069.4626474) / 35829.6199214 = 4.91 %

* 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:

Tesco PLC's Inventory Turnover for the six months ended in Aug. 2016 is calculated as:

 Inventory Turnover = Cost of Goods Sold / Average Inventory = 34069.4626474 / 3377.26081258 = 10.09

* 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.

Tesco PLC Annual Data

 Feb07 Feb08 Feb09 Feb10 Feb11 Feb12 Feb13 Feb14 Feb15 Feb16 COGS 77,257 85,792 71,736 81,723 89,242 92,447 91,721 98,588 90,687 73,684

Tesco PLC Semi-Annual Data

 Feb12 Aug12 Feb13 Aug13 Feb14 Aug14 Feb15 Aug15 Feb16 Aug16 COGS 46,096 45,481 46,944 45,848 49,627 44,720 49,603 40,011 36,989 34,069
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