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Titanium Metals Corporation (NYSE:TIE)
Inventory Turnover
0.25 (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. Titanium Metals Corporation's cost of goods sold for the six months ended in Sep. 2012 was $207 Mil. Titanium Metals Corporation's average inventory for the quarter that ended in Sep. 2012 was $845 Mil. Titanium Metals Corporation's inventory turnover for the quarter that ended in Sep. 2012 was 0.25.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Titanium Metals Corporation's days inventory for the six months ended in Sep. 2012 was 370.67.

Inventory can be measured by Days Sales of Inventory (DSI). Titanium Metals Corporation's days sales of inventory (DSI) for the six months ended in Sep. 2012 was 298.32.

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. Titanium Metals Corporation's inventory to revenue ratio for the quarter that ended in Sep. 2012 was 3.28.


Definition

Titanium Metals Corporation's Inventory Turnover for the fiscal year that ended in Dec. 2011 is calculated as

Inventory Turnover (A: Dec. 2011 )=Cost of Goods Sold (A: Dec. 2011 ) / Average Inventory (A: Dec. 2011 )
=821.6 / 677.5
=1.21

Titanium Metals Corporation's Inventory Turnover for the quarter that ended in Sep. 2012 is calculated as

Inventory Turnover (Q: Sep. 2012 )=Cost of Goods Sold (Q: Sep. 2012 ) / Average Inventory (Q: Sep. 2012 )
=207.4 / 844.8
=0.25

* 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.

Titanium Metals Corporation's Days Inventory for the six months ended in Sep. 2012 is calculated as:

Days Inventory=Inventory (Q: Sep. 2012 )/Cost of Goods Sold (Q: Sep. 2012 )*Days in Period
=844.8/207.4*91
=370.67

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

Titanium Metals Corporation's Days Sales of Inventory for the six months ended in Sep. 2012 is calculated as:

Days Sales of Inventory (DSI)=Inventory (Q: Sep. 2012 )/Revenue (Q: Sep. 2012 )*Days in Period
=844.8/257.7*91
=298.32

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.

Titanium Metals Corporation's Inventory to Revenue for the quarter that ended in Sep. 2012 is calculated as

Inventory to Revenue=Inventory (Q: Sep. 2012 ) / Revenue (Q: Sep. 2012 )
=844.8 / 257.7
=3.28

* 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.

Titanium Metals Corporation Annual Data

Dec02Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11
Inventory Turnover 2.032.221.931.511.491.481.521.391.441.21

Titanium Metals Corporation Semi-Annual Data

Jun10Sep10Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12
Inventory Turnover 0.400.360.350.400.380.350.300.300.280.25
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