Switch to:
GuruFocus has detected 6 Warning Signs with National Grid PLC \$NGG.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
National Grid PLC (NYSE:NGG)
Inventory Turnover
13.36 (As of Sep. 2016)

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. National Grid PLC's cost of goods sold for the six months ended in Sep. 2016 was \$7,113 Mil. National Grid PLC's average inventory for the quarter that ended in Sep. 2016 was \$532 Mil. National Grid PLC's inventory turnover for the quarter that ended in Sep. 2016 was 13.36.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. National Grid PLC's days inventory for the six months ended in Sep. 2016 was 13.66.

Inventory can be measured by Days Sales of Inventory (DSI). National Grid PLC's days sales of inventory (DSI) for the six months ended in Sep. 2016 was 10.26.

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. National Grid PLC's inventory to revenue ratio for the quarter that ended in Sep. 2016 was 0.06.

Definition

National Grid PLC's Inventory Turnover for the fiscal year that ended in Mar. 2016 is calculated as

 Inventory Turnover (A: Mar. 2016 ) = Cost of Goods Sold / Average Inventory = Cost of Goods Sold (A: Mar. 2016 ) / ( (Inventory (A: Mar. 2015 ) + Inventory (A: Mar. 2016 )) / 2 ) = 15712.2507123 / ( (414.050822123 + 478.632478632) / 2 ) = 15712.2507123 / 446.341650378 = 35.20

National Grid PLC's Inventory Turnover for the quarter that ended in Sep. 2016 is calculated as

 Inventory Turnover (Q: Sep. 2016 ) = Cost of Goods Sold / Average Inventory = Cost of Goods Sold (Q: Sep. 2016 ) / ( (Inventory (Q: Mar. 2016 ) + Inventory (Q: Sep. 2016 )) / 2 ) = 7113.00919842 / ( (478.632478632 + 586.070959264) / 2 ) = 7113.00919842 / 532.351718948 = 13.36

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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.

National Grid PLC's Days Inventory for the six months ended in Sep. 2016 is calculated as:

 Days Inventory = Average Inventory (Q: Sep. 2016 ) / Cost of Goods Sold (Q: Sep. 2016 ) * Days in Period = 532.351718948 / 7113.00919842 * 365 / 2 = 13.66

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

National Grid PLC's Days Sales of Inventory for the six months ended in Sep. 2016 is calculated as:

 Days Sales of Inventory (DSI) = Average Inventory (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 ) * Days in Period = 532.351718948 / 9465.17739816 * 365 / 2 = 10.26

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.

National Grid PLC's Inventory to Revenue for the quarter that ended in Sep. 2016 is calculated as

 Inventory to Revenue = Average Inventory (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 ) = 532.351718948 / 9465.17739816 = 0.06

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

National Grid PLC Annual Data

 Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Inventory Turnover 61.76 23.51 17.86 17.46 30.31 30.56 32.78 46.93 44.27 35.20

National Grid PLC Semi-Annual Data

 Mar12 Sep12 Mar13 Sep13 Mar14 Sep14 Mar15 Sep15 Mar16 Sep16 Inventory Turnover 12.55 11.65 17.53 15.08 19.14 14.61 18.01 15.05 15.83 13.36
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)