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Zoltek Companies, Inc. (NAS:ZOLT)
Total Inventories
\$71.0 Mil (As of Dec. 2013)

Zoltek Companies, Inc.'s total inventories for the quarter that ended in Dec. 2013 was \$71.0 Mil. Zoltek Companies, Inc.'s average total inventories from the quarter that ended in Sep. 2013 to the quarter that ended in Dec. 2013 was \$71.5 Mil.

In Ben Grahams calculation of liquidation value, inventory is only considered worth half of its book value. Zoltek Companies, Inc.'s liquidation value for the quarter that ended in Dec. 2013 was \$51.4 Mil.

Inventory can be measured by days sales of inventory (DSI). Zoltek Companies, Inc.'s days sales of inventory (DSI) for the three months ended in Dec. 2013 was 185.69.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Zoltek Companies, Inc.'s days inventory for the three months ended in Dec. 2013 was 218.55.

Inventory turnover measures how fast the company turns over its inventory within a year. Zoltek Companies, Inc.'s inventory turnover for the quarter that ended in Dec. 2013 was 0.42.

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. Zoltek Companies, Inc.'s inventory to revenue ratio for the quarter that ended in Dec. 2013 was 2.03.

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.

Zoltek Companies, Inc.'s liquidation value for the quarter that ended in Dec. 2013 is

 Liquidation value (Q: Dec. 2013 ) = Cash and Cash Equivalents - Total Liabilities + (0.75 * Account Receivable) + (0.5 * Inventory) = 42.401 - 46.104 + 0.75 * 26.164 + 0.5 * 71.005 = 51.4

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

Zoltek Companies, Inc.'s Days Sales of Inventory for the three months ended in Dec. 2013 is

 Days Sales of Inventory (DSI) = Average Inventory (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 ) * Days in Period = 71.475 / 35.123 * 365 / 4 = 185.69

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

Zoltek Companies, Inc.'s Days Inventory for the three months ended in Dec. 2013 is calculated as:

 Days Inventory = Average Inventory (Q: Dec. 2013 ) / Cost of Goods Sold (Q: Dec. 2013 ) * Days in Period = 71.475 / 29.842 * 365 / 4 = 218.55

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

Zoltek Companies, Inc.'s Inventory Turnover for the quarter that ended in Dec. 2013 is calculated as

 Inventory Turnover = Cost of Goods Sold (Q: Dec. 2013 ) / Average Inventory (Q: Dec. 2013 ) = 29.842 / 71.475 = 0.42

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.

Zoltek Companies, Inc.'s Inventory to Revenue for the quarter that ended in Dec. 2013 is calculated as

 Inventory to Revenue = Average Inventory (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 ) = 71.475 / 35.123 = 2.03

* 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.

Zoltek Companies, Inc. Annual Data

 Sep04 Sep05 Sep06 Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Inventory 25.9 24.8 21.7 27.9 45.7 48.1 38.0 47.9 67.9 71.9

Zoltek Companies, Inc. Quarterly Data

 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Inventory 47.9 52.9 60.4 62.4 67.9 79.9 79.0 81.1 71.9 71.0
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