Switch to:
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Sycamore Networks Inc (OTCPK:SCMR)
Total Inventories
\$9.16 Mil (As of Jan. 2013)

Sycamore Networks Inc's total inventories for the quarter that ended in Jan. 2013 was \$9.16 Mil. Sycamore Networks Inc's average total inventories from the quarter that ended in Oct. 2012 to the quarter that ended in Jan. 2013 was \$9.00 Mil.

In Ben Grahams calculation of liquidation value, inventory is only considered worth half of its book value. Sycamore Networks Inc's liquidation value for the quarter that ended in Jan. 2013 was \$58.86 Mil.

Inventory can be measured by days sales of inventory (DSI). Sycamore Networks Inc's days sales of inventory (DSI) for the three months ended in Jan. 2013 was 86.71.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Sycamore Networks Inc's days inventory for the three months ended in Jan. 2013 was 204.22.

Inventory turnover measures how fast the company turns over its inventory within a year. Sycamore Networks Inc's inventory turnover for the quarter that ended in Jan. 2013 was 0.45.

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. Sycamore Networks Inc's inventory to revenue ratio for the quarter that ended in Jan. 2013 was 0.95.

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.

Sycamore Networks Inc's liquidation value for the quarter that ended in Jan. 2013 is

 Liquidation value (Q: Jan. 2013 ) = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 64.484 - 16.538 + 0.75 * 8.44 + 0.5 * 9.162 = 58.86

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

Sycamore Networks Inc's Days Sales of Inventory for the three months ended in Jan. 2013 is

 Days Sales of Inventory (DSI) = Average Inventory (Q: Jan. 2013 ) / Revenue (Q: Jan. 2013 ) * Days in Period = 8.999 / 9.47 * 365 / 4 = 86.71

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

Sycamore Networks Inc's Days Inventory for the three months ended in Jan. 2013 is calculated as:

 Days Inventory = Average Inventory (Q: Jan. 2013 ) / Cost of Goods Sold (Q: Jan. 2013 ) * Days in Period = 8.999 / 4.021 * 365 / 4 = 204.22

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

Sycamore Networks Inc's Inventory Turnover for the quarter that ended in Jan. 2013 is calculated as

 Inventory Turnover = Cost of Goods Sold (Q: Jan. 2013 ) / Average Inventory (Q: Jan. 2013 ) = 4.021 / 8.999 = 0.45

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.

Sycamore Networks Inc's Inventory to Revenue for the quarter that ended in Jan. 2013 is calculated as

 Inventory to Revenue = Average Inventory (Q: Jan. 2013 ) / Revenue (Q: Jan. 2013 ) = 8.999 / 9.47 = 0.95

* 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.

Sycamore Networks Inc Annual Data

 Jul03 Jul04 Jul05 Jul06 Jul07 Jul08 Jul09 Jul10 Jul11 Jul12 Inventory 5.12 4.29 5.45 6.01 21.72 23.75 16.06 11.18 11.54 8.47

Sycamore Networks Inc Quarterly Data

 Oct10 Jan11 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13 Inventory 10.58 11.29 11.66 11.54 9.69 9.58 9.32 8.47 8.84 9.16
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)