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PSS World Medical, Inc. (NAS:PSSI)
Total Inventories
$166 Mil (As of Sep. 2012)

PSS World Medical, Inc.'s total inventories for the quarter that ended in Sep. 2012 was $166 Mil. PSS World Medical, Inc.'s average total inventories from the quarter that ended in Jun. 2012 to the quarter that ended in Sep. 2012 was $170 Mil.

In Ben Graham’s calculation of liquidation value, inventory is only considered worth half of its book value. PSS World Medical, Inc.'s liquidation value for the quarter that ended in Sep. 2012 was $-454 Mil.

Inventory can be measured by days sales of inventory (DSI). PSS World Medical, Inc.'s days sales of inventory (DSI) for the six months ended in Sep. 2012 was 73.74.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. PSS World Medical, Inc.'s days inventory for the six months ended in Sep. 2012 was 111.37.

Inventory turnover measures how fast the company turns over its inventory within a year. PSS World Medical, Inc.'s inventory turnover for the quarter that ended in Sep. 2012 was 1.64.

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. PSS World Medical, Inc.'s inventory to revenue ratio for the quarter that ended in Sep. 2012 was 0.40.


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.

PSS World Medical, Inc.'s liquidation value for the quarter that ended in Sep. 2012 is

Liquidation value (Q: Sep. 2012 )
=Cash and Cash Equivalents-Total Liabilities+(0.75 * Account Receivable)+(0.5 * Inventory)
=122.351-804.369+0.75 * 194.255+0.5 * 165.629
=-454

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

PSS World Medical, Inc.'s Days Sales of Inventory for the six months ended in Sep. 2012 is

Days Sales of Inventory (DSI)
=Average Inventory (Q: Sep. 2012 )/Revenue (Q: Sep. 2012 )*Days in Period
=170.0315/420.798*365 / 2
=73.74

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

PSS World Medical, Inc.'s Days Inventory for the six months ended in Sep. 2012 is calculated as:

Days Inventory=Average Inventory (Q: Sep. 2012 )/Cost of Goods Sold (Q: Sep. 2012 )*Days in Period
=170.0315/278.622*365 / 2
=111.37

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

PSS World Medical, Inc.'s Inventory Turnover for the quarter that ended in Sep. 2012 is calculated as

Inventory Turnover=Cost of Goods Sold (Q: Sep. 2012 ) / Average Inventory (Q: Sep. 2012 )
=278.622 / 170.0315
=1.64

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.

PSS World Medical, Inc.'s Inventory to Revenue for the quarter that ended in Sep. 2012 is calculated as

Inventory to Revenue=Average Inventory (Q: Sep. 2012 ) / Revenue (Q: Sep. 2012 )
=170.0315 / 420.798
=0.40

* 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.

PSS World Medical, Inc. Annual Data

Mar03Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12
Inventory 80100134173174191208219213214

PSS World Medical, Inc. Quarterly Data

Jun10Sep10Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12
Inventory 218221240213223229260214174166
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