Switch to:
Broadcom Ltd (NAS:AVGO)
Total Inventories
$1,306 Mil (As of Jul. 2016)

Broadcom Ltd's total inventories for the quarter that ended in Jul. 2016 was $1,306 Mil. Broadcom Ltd's average total inventories from the quarter that ended in Apr. 2016 to the quarter that ended in Jul. 2016 was $1,387 Mil.

In Ben Graham’s calculation of liquidation value, inventory is only considered worth half of its book value. Broadcom Ltd's liquidation value for the quarter that ended in Jul. 2016 was $-26,029 Mil.

Inventory can be measured by days sales of inventory (DSI). Broadcom Ltd's days sales of inventory (DSI) for the three months ended in Jul. 2016 was 33.36.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Broadcom Ltd's days inventory for the three months ended in Jul. 2016 was 62.94.

Inventory turnover measures how fast the company turns over its inventory within a year. Broadcom Ltd's inventory turnover for the quarter that ended in Jul. 2016 was 1.45.

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. Broadcom Ltd's inventory to revenue ratio for the quarter that ended in Jul. 2016 was 0.37.


Definition

Total Inventories includes the raw materials, work-in-process goods and completely finished goods of a company. It is a portion of a company’s current assets.


Explanation

Inventory control is an important part of business operation. If a company does not have enough inventory, it may not be able to meet customers’ required delivery time. If it has too much inventory, the cost of holding the inventory can be high.

1. In Ben Graham’s calculation of liquidation value, inventory is only considered worth half of its book value.

Broadcom Ltd's liquidation value for the quarter that ended in Jul. 2016 is

Liquidation value (Q: Jul. 2016 )
=Cash and Cash Equivalents-Total Liabilities+(0.75 * Account Receivable)+(0.5 * Inventory)
=1961-30279+0.75 * 2181+0.5 * 1306
=-26,029

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

Broadcom Ltd's Days Sales of Inventory for the three months ended in Jul. 2016 is

Days Sales of Inventory (DSI)
=Average Inventory (Q: Jul. 2016 )/Revenue (Q: Jul. 2016 )*Days in Period
=1386.5/3792*365 / 4
=33.36

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

Broadcom Ltd's Days Inventory for the three months ended in Jul. 2016 is calculated as:

Days Inventory=Average Inventory (Q: Jul. 2016 )/Cost of Goods Sold (Q: Jul. 2016 )*Days in Period
=1386.5/2010*365 / 4
=62.94

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

Broadcom Ltd's Inventory Turnover for the quarter that ended in Jul. 2016 is calculated as

Inventory Turnover=Cost of Goods Sold (Q: Jul. 2016 ) / Average Inventory (Q: Jul. 2016 )
=2010 / 1386.5
=1.45

5. 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.

Broadcom Ltd's Inventory to Revenue for the quarter that ended in Jul. 2016 is calculated as

Inventory to Revenue=Average Inventory (Q: Jul. 2016 ) / Revenue (Q: Jul. 2016 )
=1386.5 / 3792
=0.37

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


Be Aware

Manufacturers with durable competitive advantages have the advantage that the products they sell do not change, and therefore will never become obsolete. Buffett likes this advantage.

When identifying manufacturers with durable competitive advantage, look for inventory and net earnings that rise correspondingly. This indicates that the company is finding profitable ways to increase sales which called for an increase in inventory.

Manufacturers with inventories that spike up and down are indicative of competitive industries subject to boom and bust.


Related Terms

Revenue, Cash and Cash Equivalents, Total Liabilities, Account Receivable, Inventory, NCAV, Days Inventory, Cost of Goods Sold, 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.

Broadcom Ltd Annual Data

Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14Oct15
Inventory 0140188162189194194285519524

Broadcom Ltd Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
Inventory 3014825195004905075244901,4671,306
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)
FEEDBACK