Switch to:
Valeant Pharmaceuticals International Inc (NYSE:VRX)
Cost of Goods Sold
$2,411 Mil (TTM As of Jun. 2014)

Valeant Pharmaceuticals International Inc's cost of goods sold for the three months ended in Jun. 2014 was $586 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Jun. 2014 was $2,411 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Valeant Pharmaceuticals International Inc's Gross Margin for the three months ended in Jun. 2014 was 71.31%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Valeant Pharmaceuticals International Inc's Inventory Turnover for the three months ended in Jun. 2014 was 0.62.


Definition

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

Valeant Pharmaceuticals International Inc Cost of Goods Sold for the trailing twelve months (TTM) ended in Jun. 2014 was 575.208 (Sep. 2013 ) + 731.937 (Dec. 2013 ) + 518.4 (Mar. 2014 ) + 585.6 (Jun. 2014 ) = $2,411 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.

Valeant Pharmaceuticals International Inc's Gross Margin for the three months ended in Jun. 2014 is calculated as:

Gross Margin=(Revenue - Cost of Goods Sold) / Revenue
=(2041.1 - 585.6) / 2041.1
=71.31 %

* 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:

Valeant Pharmaceuticals International Inc's Inventory Turnover for the three months ended in Jun. 2014 is calculated as:

* 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.

Valeant Pharmaceuticals International Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
COGS 2222012112241973254067279701,905

Valeant Pharmaceuticals International Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
COGS 312210230218300298575732518586
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)
Free 7-day Trial
FEEDBACK