Switch to:
Sycamore Networks Inc (OTCPK:SCMR)
Inventory
$9.16 Mil (As of Jan. 2013)

Sycamore Networks Inc's inventory for the quarter that ended in Jan. 2013 was $9.16 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 88.04.

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 207.35.

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 0.44.

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 0.97.


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.

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)
=Inventory (Q: Jan. 2013 )/Revenue (Q: Jan. 2013 )*Days in Period
=9.162/9.47*91
=88.04

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=Inventory (Q: Jan. 2013 )/Cost of Goods Sold (Q: Jan. 2013 )*Days in Period
=9.162/4.021*91
=207.35

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 / 9.162
=0.44

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=Inventory (Q: Jan. 2013 ) / Revenue (Q: Jan. 2013 )
=9.162 / 9.47
=0.97

* 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.

Sycamore Networks Inc Annual Data

Jul03Jul04Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12
Inventory 5.124.295.456.0121.7223.7516.0611.1811.548.47

Sycamore Networks Inc Quarterly Data

Oct10Jan11Apr11Jul11Oct11Jan12Apr12Jul12Oct12Jan13
Inventory 10.5811.2911.6611.549.699.589.328.478.849.16
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)
Free 7-day Trial
FEEDBACK
Email Hide