Switch to:
Darden Restaurants Inc (NYSE:DRI)
Inventory
$461 Mil (As of Feb. 2014)

Darden Restaurants Inc's inventory for the quarter that ended in Feb. 2014 was $461 Mil.

In Ben Graham’s calculation of liquidation value, inventory is only considered worth half of its book value. Darden Restaurants Inc's liquidation value for the quarter that ended in Feb. 2014 was $-4,694 Mil.

Inventory can be measured by days sales of inventory (DSI). Darden Restaurants Inc's days sales of inventory (DSI) for the three months ended in Feb. 2014 was 18.79.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Darden Restaurants Inc's days inventory for the three months ended in Feb. 2014 was 23.82.

Inventory turnover measures how fast the company turns over its inventory within a year. Darden Restaurants Inc's inventory turnover for the quarter that ended in Feb. 2014 was 3.82.

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. Darden Restaurants Inc's inventory to revenue ratio for the quarter that ended in Feb. 2014 was 0.21.


Definition

Inventory 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.

Darden Restaurants Inc's liquidation value for the quarter that ended in Feb. 2014 is

Liquidation value (Q: Feb. 2014 )
=Cash and Cash Equivalents-Total Liabilities+(0.75 * Account Receivable)+(0.5 * Inventory)
=127-5103.1+0.75 * 69+0.5 * 461
=-4,694

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

Darden Restaurants Inc's Days Sales of Inventory for the three months ended in Feb. 2014 is

Days Sales of Inventory (DSI)
=Inventory (Q: Feb. 2014 )/Revenue (Q: Feb. 2014 )*Days in Period
=461/2233.1*91
=18.79

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

Darden Restaurants Inc's Days Inventory for the three months ended in Feb. 2014 is calculated as:

Days Inventory=Inventory (Q: Feb. 2014 )/Cost of Goods Sold (Q: Feb. 2014 )*Days in Period
=461/1760.9*91
=23.82

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

Darden Restaurants Inc's Inventory Turnover for the quarter that ended in Feb. 2014 is calculated as

Inventory Turnover=Cost of Goods Sold (Q: Feb. 2014 ) / Average Inventory (Q: Feb. 2014 )
=1760.9 / 461
=3.82

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.

Darden Restaurants Inc's Inventory to Revenue for the quarter that ended in Feb. 2014 is calculated as

Inventory to Revenue=Inventory (Q: Feb. 2014 ) / Revenue (Q: Feb. 2014 )
=461 / 2233.1
=0.21

* 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.

Darden Restaurants Inc Annual Data

May04May05May06May07May08May09May10May11May12May13
Inventory 199235199210217247221300404357

Darden Restaurants Inc Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
Inventory 397454404404425433357373418461
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)
Free 7-day Trial
FEEDBACK
Hide