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GuruFocus has detected 5 Warning Signs with Li & Fung Ltd \$LFUGF.
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Li & Fung Ltd (OTCPK:LFUGF)
COGS-to-Revenue
0.89 (As of Jun. 2016)

Li & Fung Ltd's cost of goods sold for the six months ended in Jun. 2016 was \$7,150 Mil. Its revenue for the six months ended in Jun. 2016 was \$8,071 Mil.

Li & Fung Ltd's COGS to Revenue for the six months ended in Jun. 2016 was 0.89.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Li & Fung Ltd's Gross Margin for the six months ended in Jun. 2016 was 11.41%.

Definition

Li & Fung Ltd's COGS to Revenue for the fiscal year that ended in Dec. 2015 is calculated as

 COGS to Revenue = Cost of Goods Sold / Revenue = 16671.655 / 18830.835 = 0.89

Li & Fung Ltd's COGS to Revenue for the quarter that ended in Jun. 2016 is calculated as

 COGS to Revenue = Cost of Goods Sold / Revenue = 7150.033 / 8070.733 = 0.89

* 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.

Li & Fung Ltd's Gross Margin for the six months ended in Jun. 2016 is calculated as:

 Gross Margin = 1 - COGS to Revenue = 1 - Cost of Goods Sold / Revenue = 1 - 7150.033 / 8070.733 = 11.41 %

* 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.

Li & Fung Ltd Annual Data

 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 cogs2rev 0.89 0.89 0.90 0.88 0.86 0.85 0.86 0.88 0.89 0.89

Li & Fung Ltd Semi-Annual Data

 Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 cogs2rev 0.84 0.86 0.86 0.89 0.88 0.89 0.89 0.89 0.88 0.89
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