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GuruFocus has detected 3 Warning Signs with Allegiant Travel Co \$ALGT.
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Allegiant Travel Co (NAS:ALGT)
Inventory-to-Revenue
0.05 (As of Dec. 2016)

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. Allegiant Travel Co's average inventory for the quarter that ended in Dec. 2016 was \$17 Mil. Allegiant Travel Co's revenue for the three months ended in Dec. 2016 was \$336 Mil. Allegiant Travel Co's inventory to revenue ratio for the quarter that ended in Dec. 2016 was 0.05.

Allegiant Travel Co's inventory to revenue ratio for the quarter that ended in Dec. 2016 stayed the same from Sep. 2016 (0.05) to Sep. 2016 (0.05)

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Allegiant Travel Co's days inventory for the three months ended in Dec. 2016 was 11.63.

Inventory can be measured by Days Sales of Inventory (DSI). Allegiant Travel Co's days sales of inventory (DSI) for the three months ended in Dec. 2016 was 4.54.

Inventory turnover measures how fast the company turns over its inventory within a year. Allegiant Travel Co's inventory turnover for the quarter that ended in Dec. 2016 was 7.85.

Definition

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.

Allegiant Travel Co's Inventory to Revenue for the fiscal year that ended in Dec. 2016 is calculated as

 Inventory to Revenue (A: Dec. 2016 ) = Average Inventory / Revenue = ( (Inventory (A: Dec. 2015 ) + Inventory (A: Dec. 2016 )) / 2 ) / Revenue (A: Dec. 2016 ) = ( (15.583 + 16.797) / 2 ) / 1362.831 = 16.19 / 1362.831 = 0.01

Allegiant Travel Co's Inventory to Revenue for the quarter that ended in Dec. 2016 is calculated as

 Inventory to Revenue (Q: Dec. 2016 ) = Average Inventory / Revenue = ( (Inventory (Q: Sep. 2016 ) + Inventory (Q: Dec. 2016 )) / 2 ) / Revenue (Q: Dec. 2016 ) = ( (16.627 + 16.797) / 2 ) / 335.883 = 16.712 / 335.883 = 0.05

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

Explanation

An increase in inventory to revenue ratio from one quarter to the next indicates that one of the following is happening:

1. investment in inventory is growing more rapidly than revenue
2. revenue are dropping
No matter which situation is causing the problem, an increase in the inventory to revenue ratio may signal an oncoming cash flow problem.

Likewise, a decrease in the inventory to revenue ratio from one quarter to next indicates that one of these is occurring:

1. investment in inventory is shrinking in relation to revenue
2. revenue are increasing
No matter which situation is causing the reduction in the inventory to revenue ratio, either one suggests that business's inventory levels and its cash flow are effectively managed.

More Related Terms:

1. Days Inventory indicates the number of days of goods in sales that a company has in the inventory.

Allegiant Travel Co's Days Inventory for the three months ended in Dec. 2016 is calculated as:

 Days Inventory = Average Inventory (Q: Dec. 2016 ) / Cost of Goods Sold (Q: Dec. 2016 ) * Days in Period = 16.712 / 131.156 * 365 / 4 = 11.63

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

Allegiant Travel Co's Days Sales of Inventory for the three months ended in Dec. 2016 is

 Days Sales of Inventory (DSI) = Average Inventory (Q: Dec. 2016 ) / Revenue (Q: Dec. 2016 ) * Days in Period = 16.712 / 335.883 * 365 / 4 = 4.54

3. Inventory Turnover measures how fast the company turns over its inventory within a year.

Allegiant Travel Co's Inventory Turnover for the quarter that ended in Dec. 2016 is calculated as

 Inventory Turnover = Cost of Goods Sold (Q: Dec. 2016 ) / Average Inventory (Q: Dec. 2016 ) = 131.156 / 16.712 = 7.85

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

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.

Allegiant Travel Co Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 inventory2rev 0.01 0.01 0.02 0.02 0.02 0.02 0.02 0.02 0.01 0.01

Allegiant Travel Co Quarterly Data

 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 inventory2rev 0.06 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.02
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