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Hovnanian Enterprises Inc (NYSE:HOV)
Days Inventory
275.84 (As of Jul. 2014)

Hovnanian Enterprises Inc's average inventory for the three months ended in Jul. 2014 was $1,336 Mil. Hovnanian Enterprises Inc's cost of goods sold for the three months ended in Jul. 2014 was $441 Mil. Hence, Hovnanian Enterprises Inc's days inventory for the three months ended in Jul. 2014 was 275.84.

Hovnanian Enterprises Inc's days inventory increased from Jul. 2013 (254.59) to Jul. 2014 (275.84). It might indicate that Hovnanian Enterprises Inc's sales slowed down.

Inventory can be measured by Days Sales of Inventory (DSI). Hovnanian Enterprises Inc's days sales of inventory (DSI) for the three months ended in Jul. 2014 was 220.63.

Inventory turnover measures how fast the company turns over its inventory within a year. Hovnanian Enterprises Inc's inventory turnover for the three months ended in Jul. 2014 was 0.33.

Inventory to revenue ratio determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue. Hovnanian Enterprises Inc's inventory to revenue ratio for the three months ended in Jul. 2014 was 2.42.


Definition

Days Inventory indicates the number of days of goods in sales that a company has in the inventory.

Hovnanian Enterprises Inc's Days Inventory for the fiscal year that ended in Oct. 2013 is calculated as

Days Inventory
=( (Inventory (A: Oct. 2012 )+Inventory (A: Oct. 2013 ))/ 2 )/Cost of Goods Sold*Days in Period
=( (981.466+1078.764)/ 2 )/1528.298*365
=1030.115/1528.298*365
=246.02

Hovnanian Enterprises Inc's Days Inventory for the quarter that ended in Jul. 2014 is calculated as:

Days Inventory
=( (Inventory (Q: Apr. 2014 )+Inventory (Q: Jul. 2014 ))/ 2 )/Cost of Goods Sold*Days in Period
=( (1295.656+1376.157)/ 2 )/440.713*91
=1335.9065/440.713*91
=275.84

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

An increase of Days Inventory may indicate the company's sales slowed.

1. Inventory can be measured by Days Sales of Inventory (DSI).

Hovnanian Enterprises Inc's Days Sales of Inventory for the three months ended in Jul. 2014 is calculated as

Days Sales of Inventory (DSI)=Average Inventory/Revenue*Days in Period
=1335.9065/551.009*91
=220.63

2. Inventory Turnover measures how fast the company turns over its inventory within a year.

Hovnanian Enterprises Inc's Inventory Turnover for the three months ended in Jul. 2014 is calculated as

3. Inventory to Revenue determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue.

Hovnanian Enterprises Inc's Inventory to Revenue for the three months ended in Jul. 2014 is calculated as

Inventory to Revenue=Average Inventory / Revenue
=1335.9065 / 551.009
=2.42

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Be Aware

A lot of business are seasonable. It makes more sense to compare Days Inventory from the same period in the previous year instead of from the previous quarter.


Related Terms

Cost of Goods Sold, Inventory, Revenue, Inventory Turnover, Inventory to Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Hovnanian Enterprises Inc Annual Data

Oct04Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13
DaysInventory 243.04273.81288.97300.07267.94272.08286.07323.41280.04246.02

Hovnanian Enterprises Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
DaysInventory 266.56277.15210.57301.72262.55254.59201.05348.23308.06275.84
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