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Dell Inc (NAS:DELL)
Total Inventories
$1,468 Mil (As of Jul. 2013)

Dell Inc's total inventories for the quarter that ended in Jul. 2013 was $1,468 Mil. Dell Inc's average total inventories from the quarter that ended in Apr. 2013 to the quarter that ended in Jul. 2013 was $1,428 Mil.

In Ben Graham’s calculation of liquidation value, inventory is only considered worth half of its book value. Dell Inc's liquidation value for the quarter that ended in Jul. 2013 was $-17,585 Mil.

Inventory can be measured by days sales of inventory (DSI). Dell Inc's days sales of inventory (DSI) for the three months ended in Jul. 2013 was 8.97.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Dell Inc's days inventory for the three months ended in Jul. 2013 was 11.02.

Inventory turnover measures how fast the company turns over its inventory within a year. Dell Inc's inventory turnover for the quarter that ended in Jul. 2013 was 8.28.

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. Dell Inc's inventory to revenue ratio for the quarter that ended in Jul. 2013 was 0.10.


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.

Dell Inc's liquidation value for the quarter that ended in Jul. 2013 is

Liquidation value (Q: Jul. 2013 )
=Cash and Cash Equivalents-Total Liabilities+(0.75 * Account Receivable)+(0.5 * Inventory)
=11828-35090+0.75 * 6591+0.5 * 1468
=-17,585

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

Dell Inc's Days Sales of Inventory for the three months ended in Jul. 2013 is

Days Sales of Inventory (DSI)
=Average Inventory (Q: Jul. 2013 )/Revenue (Q: Jul. 2013 )*Days in Period
=1427.5/14514*365 / 4
=8.97

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

Dell Inc's Days Inventory for the three months ended in Jul. 2013 is calculated as:

Days Inventory=Average Inventory (Q: Jul. 2013 )/Cost of Goods Sold (Q: Jul. 2013 )*Days in Period
=1427.5/11825*365 / 4
=11.02

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

Dell Inc's Inventory Turnover for the quarter that ended in Jul. 2013 is calculated as

Inventory Turnover=Cost of Goods Sold (Q: Jul. 2013 ) / Average Inventory (Q: Jul. 2013 )
=11825 / 1427.5
=8.28

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.

Dell Inc's Inventory to Revenue for the quarter that ended in Jul. 2013 is calculated as

Inventory to Revenue=Average Inventory (Q: Jul. 2013 ) / Revenue (Q: Jul. 2013 )
=1427.5 / 14514
=0.10

* 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.

Dell Inc Annual Data

Jan04Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13
Inventory 3274595886601,1808671,0511,3011,4041,382

Dell Inc Quarterly Data

Apr11Jul11Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13
Inventory 1,2761,3461,3971,4041,4721,6151,3641,3821,3871,468
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