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GuruFocus has detected 2 Warning Signs with Finisar Corp \$FNSR.
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Finisar Corp (NAS:FNSR)
COGS to Revenue
0.64 (As of Oct. 2016)

Finisar Corp's cost of goods sold for the three months ended in Oct. 2016 was \$236 Mil. Its revenue for the three months ended in Oct. 2016 was \$370 Mil.

Finisar Corp's COGS to Revenue for the three months ended in Oct. 2016 was 0.64.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Finisar Corp's Gross Margin for the three months ended in Oct. 2016 was 36.14%.

Definition

Finisar Corp's COGS to Revenue for the fiscal year that ended in Apr. 2016 is calculated as

 COGS to Revenue = Cost of Goods Sold / Revenue = 908.516 / 1263.166 = 0.72

Finisar Corp's COGS to Revenue for the quarter that ended in Oct. 2016 is calculated as

 COGS to Revenue = Cost of Goods Sold / Revenue = 236.182 / 369.863 = 0.64

* 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.

Finisar Corp's Gross Margin for the three months ended in Oct. 2016 is calculated as:

 Gross Margin = 1 - COGS to Revenue = 1 - Cost of Goods Sold / Revenue = 1 - 236.182 / 369.863 = 36.14 %

* 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.

Finisar Corp Annual Data

 Apr07 Apr08 Apr09 Apr10 Apr11 Apr12 Apr13 Apr14 Apr15 Apr16 cogs2rev 0.66 0.68 0.72 0.71 0.67 0.71 0.72 0.66 0.72 0.72

Finisar Corp Quarterly Data

 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 cogs2rev 0.70 0.71 0.75 0.72 0.72 0.72 0.72 0.72 0.68 0.64
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