Switch to:
PSS World Medical, Inc. (NAS:PSSI)
Inventory Turnover
1.64 (As of Sep. 2012)

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. PSS World Medical, Inc.'s cost of goods sold for the six months ended in Sep. 2012 was \$279 Mil. PSS World Medical, Inc.'s average inventory for the quarter that ended in Sep. 2012 was \$170 Mil. PSS World Medical, Inc.'s inventory turnover for the quarter that ended in Sep. 2012 was 1.64.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. PSS World Medical, Inc.'s days inventory for the six months ended in Sep. 2012 was 111.37.

Inventory can be measured by Days Sales of Inventory (DSI). PSS World Medical, Inc.'s days sales of inventory (DSI) for the six months ended in Sep. 2012 was 73.74.

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. PSS World Medical, Inc.'s inventory to revenue ratio for the quarter that ended in Sep. 2012 was 0.40.

Definition

PSS World Medical, Inc.'s Inventory Turnover for the fiscal year that ended in Mar. 2012 is calculated as

 Inventory Turnover (A: Mar. 2012 ) = Cost of Goods Sold / Average Inventory = Cost of Goods Sold (A: Mar. 2012 ) / ( (Inventory (A: Mar. 2011 ) + Inventory (A: Mar. 2012 )) / 2 ) = 1427.799 / ( (213.211 + 213.586) / 2 ) = 1427.799 / 213.3985 = 6.69

PSS World Medical, Inc.'s Inventory Turnover for the quarter that ended in Sep. 2012 is calculated as

 Inventory Turnover (Q: Sep. 2012 ) = Cost of Goods Sold / Average Inventory = Cost of Goods Sold (Q: Sep. 2012 ) / ( (Inventory (Q: Jun. 2012 ) + Inventory (Q: Sep. 2012 )) / 2 ) = 278.622 / ( (174.434 + 165.629) / 2 ) = 278.622 / 170.0315 = 1.64

* 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.

PSS World Medical, Inc.'s Days Inventory for the six months ended in Sep. 2012 is calculated as:

 Days Inventory = Average Inventory (Q: Sep. 2012 ) / Cost of Goods Sold (Q: Sep. 2012 ) * Days in Period = 170.0315 / 278.622 * 365 / 2 = 111.37

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

PSS World Medical, Inc.'s Days Sales of Inventory for the six months ended in Sep. 2012 is calculated as:

 Days Sales of Inventory (DSI) = Average Inventory (Q: Sep. 2012 ) / Revenue (Q: Sep. 2012 ) * Days in Period = 170.0315 / 420.798 * 365 / 2 = 73.74

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.

PSS World Medical, Inc.'s Inventory to Revenue for the quarter that ended in Sep. 2012 is calculated as

 Inventory to Revenue = Average Inventory (Q: Sep. 2012 ) / Revenue (Q: Sep. 2012 ) = 170.0315 / 420.798 = 0.40

* 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

Historical Data

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

PSS World Medical, Inc. Annual Data

 Mar03 Mar04 Mar05 Mar06 Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 Inventory Turnover 7.24 10.74 8.98 7.49 7.14 7.20 6.88 6.69 6.48 6.69

PSS World Medical, Inc. Semi-Annual Data

 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Inventory Turnover 1.52 1.55 1.53 1.66 1.62 1.57 1.46 1.53 1.41 1.64
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)