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GuruFocus has detected 2 Warning Signs with Novagold Resources Inc \$NG.
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Novagold Resources Inc (AMEX:NG)
Total Inventories
\$0.00 Mil (As of Feb. 2017)

Novagold Resources Inc's total inventories for the quarter that ended in Feb. 2017 was \$0.00 Mil. Novagold Resources Inc's average total inventories from the quarter that ended in Nov. 2016 to the quarter that ended in Feb. 2017 was \$0.00 Mil.

In Ben Grahams calculation of liquidation value, inventory is only considered worth half of its book value. Novagold Resources Inc's liquidation value for the quarter that ended in Feb. 2017 was \$-89.65 Mil.

Inventory can be measured by days sales of inventory (DSI).

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

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

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.

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.

Novagold Resources Inc's liquidation value for the quarter that ended in Feb. 2017 is

 Liquidation value (Q: Feb. 2017 ) = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 18.239 - 107.891 + 0.75 * 0 + 0.5 * 0 = -89.65

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

Novagold Resources Inc's Days Sales of Inventory for the three months ended in Feb. 2017 is

 Days Sales of Inventory (DSI) = Average Inventory (Q: Feb. 2017 ) / Revenue (Q: Feb. 2017 ) * Days in Period = 0 / 0 * 365 / 4 =

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

Novagold Resources Inc's Days Inventory for the three months ended in Feb. 2017 is calculated as:

 Days Inventory = Average Inventory (Q: Feb. 2017 ) / Cost of Goods Sold (Q: Feb. 2017 ) * Days in Period = 0 / 0 * 365 / 4 =

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

Novagold Resources Inc's Inventory Turnover for the quarter that ended in Feb. 2017 is calculated as

 Inventory Turnover = Cost of Goods Sold (Q: Feb. 2017 ) / Average Inventory (Q: Feb. 2017 ) = 0 / 0 = N/A

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.

Novagold Resources Inc's Inventory to Revenue for the quarter that ended in Feb. 2017 is calculated as

 Inventory to Revenue = Average Inventory (Q: Feb. 2017 ) / Revenue (Q: Feb. 2017 ) = 0 / 0 =

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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 local exchange's currency.

Novagold Resources Inc Annual Data

 Nov07 Nov08 Nov09 Nov10 Nov11 Nov12 Nov13 Nov14 Nov15 Nov16 Inventory 9.19 0.00 14.70 7.69 0.48 0.00 0.00 0.00 0.00 0.00

Novagold Resources Inc Quarterly Data

 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 Inventory 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
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