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AutoZone Inc (NYSE:AZO)
Inventory Turnover
0.36 (As of May. 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. AutoZone Inc's cost of goods sold for the three months ended in May. 2014 was $1,125 Mil. AutoZone Inc's average inventory for the quarter that ended in May. 2014 was $3,111 Mil. AutoZone Inc's inventory turnover for the quarter that ended in May. 2014 was 0.36.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. AutoZone Inc's days inventory for the three months ended in May. 2014 was 251.76.

Inventory can be measured by Days Sales of Inventory (DSI). AutoZone Inc's days sales of inventory (DSI) for the three months ended in May. 2014 was 120.92.

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. AutoZone Inc's inventory to revenue ratio for the quarter that ended in May. 2014 was 1.33.


Definition

AutoZone Inc's Inventory Turnover for the fiscal year that ended in Aug. 2013 is calculated as

Inventory Turnover (A: Aug. 2013 )
=Cost of Goods Sold (A: Aug. 2013 )/( (Inventory (A: Aug. 2012 )+Inventory (A: Aug. 2013 ))/ 2 )
=4406.595/( (2627.983+2861.014)/ 2 )
=4406.595/2744.4985
=1.61

AutoZone Inc's Inventory Turnover for the quarter that ended in May. 2014 is calculated as

Inventory Turnover (Q: May. 2014 )
=Cost of Goods Sold (Q: May. 2014 )/( (Inventory (Q: Feb. 2014 )+Inventory (Q: May. 2014 ))/ 2 )
=1124.587/( (3089.245+3133.35)/ 2 )
=1124.587/3111.2975
=0.36

* 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.

AutoZone Inc's Days Inventory for the three months ended in May. 2014 is calculated as:

Days Inventory=Average Inventory (Q: May. 2014 )/Cost of Goods Sold (Q: May. 2014 )*Days in Period
=3111.2975/1124.587*91
=251.76

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

AutoZone Inc's Days Sales of Inventory for the three months ended in May. 2014 is calculated as:

Days Sales of Inventory=Average Inventory (Q: May. 2014 )/Revenue (Q: May. 2014 )*Days in Period
=3111.2975/2341.545*91
=120.92

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.

AutoZone Inc's Inventory to Revenue for the quarter that ended in May. 2014 is calculated as

Inventory to Revenue=Average Inventory (Q: May. 2014 ) / Revenue (Q: May. 2014 )
=3111.2975 / 2341.545
=1.33

* 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.

AutoZone Inc Annual Data

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
Inventory Turnover 1.811.711.611.571.561.621.661.641.611.51

AutoZone Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
Inventory Turnover 0.390.510.360.330.380.530.350.320.360.46
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