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Sycamore Networks Inc (OTCPK:SCMR)
Inventory Turnover
0.45 (As of Jan. 2013)

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. Sycamore Networks Inc's cost of goods sold for the three months ended in Jan. 2013 was \$4.02 Mil. Sycamore Networks Inc's average inventory for the quarter that ended in Jan. 2013 was \$9.00 Mil. Sycamore Networks Inc's inventory turnover for the quarter that ended in Jan. 2013 was 0.45.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Sycamore Networks Inc's days inventory for the three months ended in Jan. 2013 was 204.22.

Inventory can be measured by Days Sales of Inventory (DSI). Sycamore Networks Inc's days sales of inventory (DSI) for the three months ended in Jan. 2013 was 86.71.

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. Sycamore Networks Inc's inventory to revenue ratio for the quarter that ended in Jan. 2013 was 0.95.

Definition

Sycamore Networks Inc's Inventory Turnover for the fiscal year that ended in Jul. 2012 is calculated as

 Inventory Turnover (A: Jul. 2012 ) = Cost of Goods Sold / Average Inventory = Cost of Goods Sold (A: Jul. 2012 ) / ( (Inventory (A: Jul. 2011 ) + Inventory (A: Jul. 2012 )) / 2 ) = 24.331 / ( (11.537 + 8.469) / 2 ) = 24.331 / 10.003 = 2.43

Sycamore Networks Inc's Inventory Turnover for the quarter that ended in Jan. 2013 is calculated as

 Inventory Turnover (Q: Jan. 2013 ) = Cost of Goods Sold / Average Inventory = Cost of Goods Sold (Q: Jan. 2013 ) / ( (Inventory (Q: Oct. 2012 ) + Inventory (Q: Jan. 2013 )) / 2 ) = 4.021 / ( (8.836 + 9.162) / 2 ) = 4.021 / 8.999 = 0.45

* 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.

Sycamore Networks Inc's Days Inventory for the three months ended in Jan. 2013 is calculated as:

 Days Inventory = Average Inventory (Q: Jan. 2013 ) / Cost of Goods Sold (Q: Jan. 2013 ) * Days in Period = 8.999 / 4.021 * 365 / 4 = 204.22

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

Sycamore Networks Inc's Days Sales of Inventory for the three months ended in Jan. 2013 is calculated as:

 Days Sales of Inventory (DSI) = Average Inventory (Q: Jan. 2013 ) / Revenue (Q: Jan. 2013 ) * Days in Period = 8.999 / 9.47 * 365 / 4 = 86.71

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.

Sycamore Networks Inc's Inventory to Revenue for the quarter that ended in Jan. 2013 is calculated as

 Inventory to Revenue = Average Inventory (Q: Jan. 2013 ) / Revenue (Q: Jan. 2013 ) = 8.999 / 9.47 = 0.95

* 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.

Sycamore Networks Inc Annual Data

 Jul03 Jul04 Jul05 Jul06 Jul07 Jul08 Jul09 Jul10 Jul11 Jul12 Inventory Turnover 3.90 6.62 7.07 7.67 6.36 2.75 1.93 2.27 1.98 2.43

Sycamore Networks Inc Quarterly Data

 Oct10 Jan11 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13 Inventory Turnover 0.63 0.47 0.43 0.49 0.59 0.56 0.58 0.81 0.57 0.45
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