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TAL Education Group (NYSE:XRS)
Total Inventories
\$0.6 Mil (As of Feb. 2016)

TAL Education Group's total inventories for the quarter that ended in Feb. 2016 was \$0.6 Mil. TAL Education Group's average total inventories from the quarter that ended in Nov. 2015 to the quarter that ended in Feb. 2016 was \$0.5 Mil.

In Ben Grahams calculation of liquidation value, inventory is only considered worth half of its book value. TAL Education Group's liquidation value for the quarter that ended in Feb. 2016 was \$-156.9 Mil.

Inventory can be measured by days sales of inventory (DSI). TAL Education Group's days sales of inventory (DSI) for the three months ended in Feb. 2016 was 0.25.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. TAL Education Group's days inventory for the three months ended in Feb. 2016 was 0.49.

Inventory turnover measures how fast the company turns over its inventory within a year. TAL Education Group's inventory turnover for the quarter that ended in Feb. 2016 was 185.33.

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. TAL Education Group's inventory to revenue ratio for the quarter that ended in Feb. 2016 was 0.00.

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.

TAL Education Group's liquidation value for the quarter that ended in Feb. 2016 is

 Liquidation value (Q: Feb. 2016 ) = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 461.512 - 624.399 + 0.75 * 7.601 + 0.5 * 0.6 = -156.9

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

TAL Education Group's Days Sales of Inventory for the three months ended in Feb. 2016 is

 Days Sales of Inventory (DSI) = Average Inventory (Q: Feb. 2016 ) / Revenue (Q: Feb. 2016 ) * Days in Period = 0.479 / 175.049 * 365 / 4 = 0.25

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

TAL Education Group's Days Inventory for the three months ended in Feb. 2016 is calculated as:

 Days Inventory = Average Inventory (Q: Feb. 2016 ) / Cost of Goods Sold (Q: Feb. 2016 ) * Days in Period = 0.479 / 88.774 * 365 / 4 = 0.49

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

TAL Education Group's Inventory Turnover for the quarter that ended in Feb. 2016 is calculated as

 Inventory Turnover = Cost of Goods Sold (Q: Feb. 2016 ) / Average Inventory (Q: Feb. 2016 ) = 88.774 / 0.479 = 185.33

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.

TAL Education Group's Inventory to Revenue for the quarter that ended in Feb. 2016 is calculated as

 Inventory to Revenue = Average Inventory (Q: Feb. 2016 ) / Revenue (Q: Feb. 2016 ) = 0.479 / 175.049 = 0.00

* 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

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

TAL Education Group Annual Data

 Feb09 Feb10 Feb11 Feb12 Feb13 Feb14 Feb15 Feb16 Inventory 0.0 0.0 0.0 0.1 0.1 0.2 0.4 0.2 0.5 0.6

TAL Education Group Quarterly Data

 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Inventory 0.2 0.2 0.2 0.3 0.5 0.3 0.4 0.4 0.6 1.0
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