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GuruFocus has detected 2 Warning Signs with Rio Tinto PLC $RIO.
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Rio Tinto PLC (NYSE:RIO)
Days Inventory
41.55 (As of Dec. 2016)

Rio Tinto PLC's average inventory for the six months ended in Dec. 2016 was $3,033 Mil. Rio Tinto PLC's cost of goods sold for the six months ended in Dec. 2016 was $13,321 Mil. Hence, Rio Tinto PLC's days inventory for the six months ended in Dec. 2016 was 41.55.

RIO' s Days Inventory Range Over the Past 10 Years
Min: 37.99   Max: 223.79
Current: 40.27

37.99
223.79

During the past 13 years, Rio Tinto PLC's highest Days Inventory was 223.79. The lowest was 37.99. And the median was 54.75.

RIO's Days Inventory is ranked higher than
76% of the 606 Companies
in the Global Industrial Metals & Minerals industry.

( Industry Median: 76.92 vs. RIO: 40.27 )

Rio Tinto PLC's days inventory declined from Dec. 2015 (46.52) to Dec. 2016 (41.55).

Inventory can be measured by Days Sales of Inventory (DSI). Rio Tinto PLC's days sales of inventory (DSI) for the six months ended in Dec. 2016 was 30.28.

Inventory turnover measures how fast the company turns over its inventory within a year. Rio Tinto PLC's inventory turnover for the six months ended in Dec. 2016 was 4.39.

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. Rio Tinto PLC's inventory to revenue ratio for the six months ended in Dec. 2016 was 0.17.


Definition

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

Rio Tinto PLC's Days Inventory for the fiscal year that ended in Dec. 2016 is calculated as

Days Inventory (A: Dec. 2016 )
=Average Inventory / COGS*Days in Period
=( (Inventory (A: Dec. 2015 ) + Inventory (A: Dec. 2016 )) / 2 ) / COGS (A: Dec. 2016 )*Days in Period
=( (3168 + 2937) / 2 ) / 26799*365
=3052.5 / 26799*365
=41.57

Rio Tinto PLC's Days Inventory for the quarter that ended in Dec. 2016 is calculated as:

Days Inventory (Q: Dec. 2016 )
=Average Inventory / COGS*Days in Period
=( (Inventory (Q: Jun. 2016 ) + Inventory (Q: Dec. 2016 )) / 2 ) / COGS (Q: Dec. 2016 )*Days in Period
=( (3129 + 2937) / 2 ) / 13321*365 / 2
=3033 / 13321*365 / 2
=41.55

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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).

Rio Tinto PLC's Days Sales of Inventory for the six months ended in Dec. 2016 is calculated as

Days Sales of Inventory (DSI)=Average Inventory/Revenue*Days in Period
=3033/18281*365 / 2
=30.28

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

Rio Tinto PLC's Inventory Turnover for the six months ended in Dec. 2016 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.

Rio Tinto PLC's Inventory to Revenue for the six months ended in Dec. 2016 is calculated as

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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 local exchange's currency.

Rio Tinto PLC Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DaysInventory 221.92116.6355.7947.2450.6555.6460.0254.2949.1441.57

Rio Tinto PLC Semi-Annual Data

Jun12Dec12Jun13Dec13Jun14Dec14Jun15Dec15Jun16Dec16
DaysInventory 55.4654.3062.3260.5861.4353.5553.9046.5242.6341.55
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