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GuruFocus has detected 6 Warning Signs with Educational Development Corp \$EDUC.
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Educational Development Corp (NAS:EDUC)
COGS-to-Revenue
0.27 (As of Nov. 2016)

Educational Development Corp's cost of goods sold for the three months ended in Nov. 2016 was \$8.33 Mil. Its revenue for the three months ended in Nov. 2016 was \$30.70 Mil.

Educational Development Corp's COGS to Revenue for the three months ended in Nov. 2016 was 0.27.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Educational Development Corp's Gross Margin for the three months ended in Nov. 2016 was 72.87%.

Definition

Educational Development Corp's COGS to Revenue for the fiscal year that ended in Feb. 2016 is calculated as

 COGS to Revenue = Cost of Goods Sold / Revenue = 20.494 / 63.618 = 0.32

Educational Development Corp's COGS to Revenue for the quarter that ended in Nov. 2016 is calculated as

 COGS to Revenue = Cost of Goods Sold / Revenue = 8.328 / 30.698 = 0.27

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

Explanation

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin.

Educational Development Corp's Gross Margin for the three months ended in Nov. 2016 is calculated as:

 Gross Margin = 1 - COGS to Revenue = 1 - Cost of Goods Sold / Revenue = 1 - 8.328 / 30.698 = 72.87 %

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

A company that has a moat can usually maintain or even expand their Gross Margin. A company can increase its Gross Margin in two ways. It can increase the prices of the goods it sells and keeps its Cost of Goods Sold unchanged. Or it can keep the sales price unchanged and squeeze its suppliers to reduce the Cost of Goods Sold. Warren Buffett believes businesses with the power to raise prices have moats.

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.

Educational Development Corp Annual Data

 Feb07 Feb08 Feb09 Feb10 Feb11 Feb12 Feb13 Feb14 Feb15 Feb16 cogs2rev 0.36 0.35 0.36 0.37 0.38 0.40 0.41 0.40 0.39 0.32

Educational Development Corp Quarterly Data

 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 cogs2rev 0.44 0.38 0.37 0.37 0.36 0.30 0.29 0.29 0.29 0.27
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