Switch to:
Masco Corp (NYSE:MAS)
Inventory
$838 Mil (As of Mar. 2014)

Masco Corp's inventory for the quarter that ended in Mar. 2014 was $838 Mil.

In Ben Graham’s calculation of liquidation value, inventory is only considered worth half of its book value. Masco Corp's liquidation value for the quarter that ended in Mar. 2014 was $-3,777 Mil.

Inventory can be measured by days sales of inventory (DSI). Masco Corp's days sales of inventory (DSI) for the three months ended in Mar. 2014 was 38.81.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Masco Corp's days inventory for the three months ended in Mar. 2014 was 53.78.

Inventory turnover measures how fast the company turns over its inventory within a year. Masco Corp's inventory turnover for the quarter that ended in Mar. 2014 was 1.69.

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. Masco Corp's inventory to revenue ratio for the quarter that ended in Mar. 2014 was 0.43.


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.

Masco Corp's liquidation value for the quarter that ended in Mar. 2014 is

Liquidation value (Q: Mar. 2014 )
=Cash and Cash Equivalents-Total Liabilities+(0.75 * Account Receivable)+(0.5 * Inventory)
=1211-6318+0.75 * 1215+0.5 * 838
=-3,777

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

Masco Corp's Days Sales of Inventory for the three months ended in Mar. 2014 is

Days Sales of Inventory (DSI)
=Inventory (Q: Mar. 2014 )/Revenue (Q: Mar. 2014 )*Days in Period
=838/1965*91
=38.81

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

Masco Corp's Days Inventory for the three months ended in Mar. 2014 is calculated as:

Days Inventory=Inventory (Q: Mar. 2014 )/Cost of Goods Sold (Q: Mar. 2014 )*Days in Period
=838/1418*91
=53.78

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

Masco Corp's Inventory Turnover for the quarter that ended in Mar. 2014 is calculated as

Inventory Turnover=Cost of Goods Sold (Q: Mar. 2014 ) / Average Inventory (Q: Mar. 2014 )
=1418 / 838
=1.69

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.

Masco Corp's Inventory to Revenue for the quarter that ended in Mar. 2014 is calculated as

Inventory to Revenue=Inventory (Q: Mar. 2014 ) / Revenue (Q: Mar. 2014 )
=838 / 1965
=0.43

* 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.

Masco Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Inventory 1,1321,1271,2631,126941743732769726765

Masco Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Inventory 769828844830726763791777765838
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
Email Hide