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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

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

 Jan04 Jan05 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Inventory 327 459 588 660 1,180 867 1,051 1,301 1,404 1,382

Dell Inc Quarterly Data

 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13 Apr13 Jul13 Inventory 1,276 1,346 1,397 1,404 1,472 1,615 1,364 1,382 1,387 1,468
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