Switch to:
Analog Devices Inc (NAS:ADI)
Inventory Turnover
0.61 (As of Jul. 2014)

Inventory turnover measures how fast the company turns over its inventory within a year. It is calculated as cost of goods sold divided by average inventory. Analog Devices Inc's cost of goods sold for the three months ended in Jul. 2014 was $251 Mil. Analog Devices Inc's average inventory for the quarter that ended in Jul. 2014 was $415 Mil. Analog Devices Inc's inventory turnover for the quarter that ended in Jul. 2014 was 0.61.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Analog Devices Inc's days inventory for the three months ended in Jul. 2014 was 150.22.

Inventory can be measured by Days Sales of Inventory (DSI). Analog Devices Inc's days sales of inventory (DSI) for the three months ended in Jul. 2014 was 51.90.

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. Analog Devices Inc's inventory to revenue ratio for the quarter that ended in Jul. 2014 was 0.57.


Definition

Analog Devices Inc's Inventory Turnover for the fiscal year that ended in Oct. 2013 is calculated as

Inventory Turnover (A: Oct. 2013 )=Cost of Goods Sold (A: Oct. 2013 ) / Average Inventory (A: Oct. 2013 )
=941.278 / 283.337
=3.32

Analog Devices Inc's Inventory Turnover for the quarter that ended in Jul. 2014 is calculated as

Inventory Turnover (Q: Jul. 2014 )=Cost of Goods Sold (Q: Jul. 2014 ) / Average Inventory (Q: Jul. 2014 )
=251.462 / 415.098
=0.61

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


Explanation

Inventory Turnover measures how fast the company turns over its inventory within a year. A higher inventory turnover means the company has light inventory. Therefore the company spends less money on storage, write downs, and obsolete inventory. If the inventory is too light, it may affect sales because the company may not have enough to meet demand.

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

Analog Devices Inc's Days Inventory for the three months ended in Jul. 2014 is calculated as:

Days Inventory=Inventory (Q: Jul. 2014 )/Cost of Goods Sold (Q: Jul. 2014 )*Days in Period
=415.098/251.462*91
=150.22

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

Analog Devices Inc's Days Sales of Inventory for the three months ended in Jul. 2014 is calculated as:

Days Sales of Inventory (DSI)=Inventory (Q: Jul. 2014 )/Revenue (Q: Jul. 2014 )*Days in Period
=415.098/727.752*91
=51.90

3. 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.

Analog Devices Inc's Inventory to Revenue for the quarter that ended in Jul. 2014 is calculated as

Inventory to Revenue=Inventory (Q: Jul. 2014 ) / Revenue (Q: Jul. 2014 )
=415.098 / 727.752
=0.57

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


Be Aware

Usually retailers pile up their inventories at holiday seasons to meet the stronger demand. Therefore, the inventory of a particular quarter of a year should not be used to calculate inventory turnover. An average inventory is a better indication.


Related Terms

Inventory, Cost of Goods Sold, Days Inventory, Revenue, Inventory to Revenue


Historical Data

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

Analog Devices Inc Annual Data

Oct04Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13
Inventory Turnover 3.123.092.822.953.203.543.473.413.063.32

Analog Devices Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Inventory Turnover 0.770.750.800.750.790.840.820.760.790.61
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