Switch to:
GuruFocus has detected 2 Warning Signs with Village Super Market Inc \$VLGEA.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Village Super Market Inc (NAS:VLGEA)
Cost of Goods Sold
\$1,191 Mil (TTM As of Oct. 2016)

Village Super Market Inc's cost of goods sold for the three months ended in Oct. 2016 was \$285 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Oct. 2016 was \$1,191 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Village Super Market Inc's Gross Margin for the three months ended in Oct. 2016 was 26.85%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Village Super Market Inc's Inventory Turnover for the three months ended in Oct. 2016 was 6.69.

Definition

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

Village Super Market Inc Cost of Goods Sold for the trailing twelve months (TTM) ended in Oct. 2016 was 307.444 (Jan. 2016 ) + 281.167 (Apr. 2016 ) + 317.221 (Jul. 2016 ) + 285.044 (Oct. 2016 ) = \$1,191 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.

Village Super Market Inc's Gross Margin for the three months ended in Oct. 2016 is calculated as:

 Gross Margin = (Revenue - Cost of Goods Sold) / Revenue = (389.692 - 285.044) / 389.692 = 26.85 %

* 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:

Village Super Market Inc's Inventory Turnover for the three months ended in Oct. 2016 is calculated as:

 Inventory Turnover = Cost of Goods Sold / Average Inventory = 285.044 / 42.623 = 6.69

* 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.

Village Super Market Inc Annual Data

 Jul07 Jul08 Jul09 Jul10 Jul11 Jul12 Jul13 Jul14 Jul15 Jul16 COGS 764 823 878 919 949 1,033 1,079 1,110 1,151 1,190

Village Super Market Inc Quarterly Data

 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 COGS 288 277 300 280 294 284 307 281 317 285
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)