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Tesco PLC (OTCPK:TSCDY)
Inventory Turnover
13.92 (As of Feb. 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. Tesco PLC's cost of goods sold for the six months ended in Feb. 2014 was $49,792 Mil. Tesco PLC's average inventory for the quarter that ended in Feb. 2014 was $5,940 Mil. Tesco PLC's inventory turnover for the quarter that ended in Feb. 2014 was 13.92.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Tesco PLC's days inventory for the six months ended in Feb. 2014 was 10.86.

Inventory can be measured by Days Sales of Inventory (DSI). Tesco PLC's days sales of inventory (DSI) for the six months ended in Feb. 2014 was 10.28.

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. Tesco PLC's inventory to revenue ratio for the quarter that ended in Feb. 2014 was 0.11.


Definition

Tesco PLC's Inventory Turnover for the fiscal year that ended in Feb. 2014 is calculated as

Inventory Turnover (A: Feb. 2014 )=Cost of Goods Sold (A: Feb. 2014 ) / Average Inventory (A: Feb. 2014 )
=98915.282392 / 5940.19933555
=16.65

Tesco PLC's Inventory Turnover for the quarter that ended in Feb. 2014 is calculated as

Inventory Turnover (Q: Feb. 2014 )=Cost of Goods Sold (Q: Feb. 2014 ) / Average Inventory (Q: Feb. 2014 )
=49792.358804 / 5940.19933555
=8.38

* 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.

Tesco PLC's Days Inventory for the six months ended in Feb. 2014 is calculated as:

Days Inventory=Inventory (Q: Feb. 2014 )/Cost of Goods Sold (Q: Feb. 2014 )*Days in Period
=5940.19933555/49792.358804*91
=10.86

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

Tesco PLC's Days Sales of Inventory for the six months ended in Feb. 2014 is calculated as:

Days Sales of Inventory (DSI)=Inventory (Q: Feb. 2014 )/Revenue (Q: Feb. 2014 )*Days in Period
=5940.19933555/52563.1229236*91
=10.28

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.

Tesco PLC's Inventory to Revenue for the quarter that ended in Feb. 2014 is calculated as

Inventory to Revenue=Inventory (Q: Feb. 2014 ) / Revenue (Q: Feb. 2014 )
=5940.19933555 / 52563.1229236
=0.11

* 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.

Tesco PLC Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
Inventory Turnover 23.8624.8820.4017.9718.6319.1717.5016.4816.2216.65

Tesco PLC Semi-Annual Data

Aug09Feb10Aug10Feb11Aug11Feb12Aug12Feb13Aug13Feb14
Inventory Turnover 16.2314.6614.4214.3812.7513.1713.4912.3712.8313.92
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