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Forest Laboratories (FRA:FQX) Inventory Turnover : 0.47 (As of Mar. 2014)


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What is Forest Laboratories Inventory Turnover?

Inventory Turnover measures how fast the company turns over its inventory within a year. It is calculated as Cost of Goods Sold divided by Total Inventories. Forest Laboratories's Cost of Goods Sold for the three months ended in Mar. 2014 was €180 Mil. Forest Laboratories's Average Total Inventories for the quarter that ended in Mar. 2014 was €381 Mil. Forest Laboratories's Inventory Turnover for the quarter that ended in Mar. 2014 was 0.47.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. Forest Laboratories's Days Inventory for the three months ended in Mar. 2014 was 193.07.

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. Forest Laboratories's Inventory-to-Revenue for the quarter that ended in Mar. 2014 was 0.48.


Forest Laboratories Inventory Turnover Historical Data

The historical data trend for Forest Laboratories's Inventory Turnover can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Forest Laboratories Inventory Turnover Chart

Forest Laboratories Annual Data
Trend Mar05 Mar06 Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14
Inventory Turnover
Get a 7-Day Free Trial Premium Member Only Premium Member Only 2.11 2.06 2.76 1.89 1.47

Forest Laboratories Quarterly Data
Jun09 Sep09 Dec09 Mar10 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14
Inventory Turnover Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.46 0.38 0.34 0.39 0.47

Forest Laboratories Inventory Turnover Calculation

Forest Laboratories's Inventory Turnover for the fiscal year that ended in Mar. 2014 is calculated as

Inventory Turnover (A: Mar. 2014 )
=Cost of Goods Sold / Average Total Inventories
=Cost of Goods Sold (A: Mar. 2014 ) / ((Total Inventories (A: Mar. 2013 ) + Total Inventories (A: Mar. 2014 )) / count )
=549.944 / ((304.092 + 442.956) / 2 )
=549.944 / 373.524
=1.47

Forest Laboratories's Inventory Turnover for the quarter that ended in Mar. 2014 is calculated as

Inventory Turnover (Q: Mar. 2014 )
=Cost of Goods Sold / Average Total Inventories
=Cost of Goods Sold (Q: Mar. 2014 ) / ((Total Inventories (Q: Dec. 2013 ) + Total Inventories (Q: Mar. 2014 )) / count )
=180.235 / ((319.741 + 442.956) / 2 )
=180.235 / 381.3485
=0.47

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Forest Laboratories  (FRA:FQX) Inventory Turnover 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.

Forest Laboratories's Days Inventory for the three months ended in Mar. 2014 is calculated as:

Days Inventory =Average Total Inventories (Q: Mar. 2014 )/Cost of Goods Sold (Q: Mar. 2014 )*Days in Period
=381.3485/180.235*365 / 4
=193.07

2. 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.

Forest Laboratories's Inventory to Revenue for the quarter that ended in Mar. 2014 is calculated as

Inventory-to-Revenue=Average Total Inventories (Q: Mar. 2014 ) / Revenue (Q: Mar. 2014 )
=381.3485 / 789.717
=0.48

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange 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.


Forest Laboratories Inventory Turnover Related Terms

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Forest Laboratories (FRA:FQX) Business Description

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Forest Laboratories, Inc. is a Delaware corporation organized in 1956. The Company develops, manufactures and sells branded forms of ethical drug products most of which require a physician's prescription. The Company's most important United States products are marketed directly, or 'detailed,' to physicians by its salesforces. It emphasizes detailing to physicians of those branded ethical drugs which have the most potential for growth and benefit to patients. The Company also develops and introduces new products, including products developed in collaboration with licensing partners. The Company's products include those developed by it and those acquired from other pharmaceutical companies and integrated into its marketing and distribution systems. It actively promotes in the United States those branded products which have the most potential for growth and patient benefit, and which enable its salesforces to concentrate on groups of physicians who are high prescribers of its products. Such products include: Lexapro, its SSRI for the treatment of major depression in adults and adolescents and GAD in adults; Namenda, its NMDA antagonist for the treatment of moderate and severe Alzheimer's disease; Bystolic, its beta-blocker for the treatment of hypertension; and Savella, its newest product, an SNRI for the management of fibromyalgia. The Company's United Kingdom and Ireland subsidiaries sell both ethical products and over-the-counter preparations. Their most important products include Sudocrem, a topical preparation for the treatment of diaper rash; Colomycin, an antibiotic used in the treatment of cystic fibrosis; Infacol, used to treat infant colic; and Exorex, used in the treatment of eczema and psoriasis. The pharmaceutical industry is subject to comprehensive government regulation which substantially increases the difficulty and cost incurred in obtaining the approval to market newly proposed drug products and maintaining the approval to market existing drugs.

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