Switch to:
GuruFocus has detected 2 Warning Signs with Wal-Mart Stores Inc \$WMT.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Wal-Mart Stores Inc (NYSE:WMT)
Cost of Goods Sold
\$360,512 Mil (TTM As of Oct. 2016)

Wal-Mart Stores Inc's cost of goods sold for the three months ended in Oct. 2016 was \$87,484 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Oct. 2016 was \$360,512 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Wal-Mart Stores Inc's Gross Margin for the three months ended in Oct. 2016 was 25.97%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Wal-Mart Stores Inc's Inventory Turnover for the three months ended in Oct. 2016 was 1.88.

Definition

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

Wal-Mart Stores Inc Cost of Goods Sold for the trailing twelve months (TTM) ended in Oct. 2016 was 96999 (Jan. 2016 ) + 86544 (Apr. 2016 ) + 89485 (Jul. 2016 ) + 87484 (Oct. 2016 ) = \$360,512 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.

Wal-Mart Stores Inc's Gross Margin for the three months ended in Oct. 2016 is calculated as:

 Gross Margin = (Revenue - Cost of Goods Sold) / Revenue = (118179 - 87484) / 118179 = 25.97 %

* 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:

Wal-Mart Stores Inc's Inventory Turnover for the three months ended in Oct. 2016 is calculated as:

 Inventory Turnover = Cost of Goods Sold / Average Inventory = 87484 / 46637.5 = 1.88

* 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.

Wal-Mart Stores Inc Annual Data

 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 COGS 263,979 286,350 304,056 304,444 314,946 334,993 352,297 358,069 365,086 360,984

Wal-Mart Stores Inc Quarterly Data

 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 COGS 90,010 89,247 99,115 86,483 90,056 87,446 96,999 86,544 89,485 87,484
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)