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Vodafone Group PLC (NAS:VOD)
Total Inventories
$850 Mil (As of Sep. 2014)

Vodafone Group PLC's total inventories for the quarter that ended in Sep. 2014 was $850 Mil. Vodafone Group PLC's average total inventories from the quarter that ended in Mar. 2014 to the quarter that ended in Sep. 2014 was $791 Mil.

In Ben Graham’s calculation of liquidation value, inventory is only considered worth half of its book value. Vodafone Group PLC's liquidation value for the quarter that ended in Sep. 2014 was $-59,672 Mil.

Inventory can be measured by days sales of inventory (DSI). Vodafone Group PLC's days sales of inventory (DSI) for the six months ended in Sep. 2014 was 4.27.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Vodafone Group PLC's days inventory for the six months ended in Sep. 2014 was 5.73.

Inventory turnover measures how fast the company turns over its inventory within a year. Vodafone Group PLC's inventory turnover for the quarter that ended in Sep. 2014 was 31.85.

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. Vodafone Group PLC's inventory to revenue ratio for the quarter that ended in Sep. 2014 was 0.02.


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.

Vodafone Group PLC's liquidation value for the quarter that ended in Sep. 2014 is

Liquidation value (Q: Sep. 2014 )
=Cash and Cash Equivalents-Total Liabilities+(0.75 * Account Receivable)+(0.5 * Inventory)
=15309.4462541-86809.4462541+0.75 * 15203.5830619+0.5 * 850.16286645
=-59,672

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

Vodafone Group PLC's Days Sales of Inventory for the six months ended in Sep. 2014 is

Days Sales of Inventory (DSI)
=Average Inventory (Q: Sep. 2014 )/Revenue (Q: Sep. 2014 )*Days in Period
=791.360502992/33798.0456026*365 / 2
=4.27

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

Vodafone Group PLC's Days Inventory for the six months ended in Sep. 2014 is calculated as:

Days Inventory=Average Inventory (Q: Sep. 2014 )/Cost of Goods Sold (Q: Sep. 2014 )*Days in Period
=791.360502992/25205.2117264*365 / 2
=5.73

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

Vodafone Group PLC's Inventory Turnover for the quarter that ended in Sep. 2014 is calculated as

Inventory Turnover=Cost of Goods Sold (Q: Sep. 2014 ) / Average Inventory (Q: Sep. 2014 )
=25205.2117264 / 791.360502992
=31.85

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.

Vodafone Group PLC's Inventory to Revenue for the quarter that ended in Sep. 2014 is calculated as

Inventory to Revenue=Average Inventory (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=791.360502992 / 33798.0456026
=0.02

* 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.

Vodafone Group PLC Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
Inventory 839518560834584652868769532733

Vodafone Group PLC Quarterly Data

Mar10Sep10Mar11Sep11Mar12Sep12Mar13Sep13Mar14Sep14
Inventory 652892868915769918532824733850
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