Switch to:
Molycorp Inc (NYSE:MCP)
Inventory to Revenue
1.45 (As of Dec. 2014)

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. Molycorp Inc's average inventory for the quarter that ended in Dec. 2014 was \$168.1 Mil. Molycorp Inc's revenue for the three months ended in Dec. 2014 was \$116.2 Mil. Molycorp Inc's inventory to revenue ratio for the quarter that ended in Dec. 2014 was 1.45.

Molycorp Inc's inventory to revenue ratio for the quarter that ended in Dec. 2014 increased from Sep. 2014 (1.41) to Sep. 2014 (1.45)

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.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Molycorp Inc's days inventory for the three months ended in Dec. 2014 was 95.24.

Inventory can be measured by Days Sales of Inventory (DSI). Molycorp Inc's days sales of inventory (DSI) for the three months ended in Dec. 2014 was 131.98.

Inventory turnover measures how fast the company turns over its inventory within a year. Molycorp Inc's inventory turnover for the quarter that ended in Dec. 2014 was 0.96.

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.

Molycorp Inc's Inventory to Revenue for the fiscal year that ended in Dec. 2014 is calculated as

 Inventory to Revenue (A: Dec. 2014 ) = Average Inventory / Revenue = ( (Inventory (A: Dec. 2013 ) + Inventory (A: Dec. 2014 )) / 2 ) / Revenue (A: Dec. 2014 ) = ( (171.783 + 169.323) / 2 ) / 475.612 = 170.553 / 475.612 = 0.36

Molycorp Inc's Inventory to Revenue for the quarter that ended in Dec. 2014 is calculated as

 Inventory to Revenue (Q: Dec. 2014 ) = Average Inventory / Revenue = ( (Inventory (Q: Sep. 2014 ) + Inventory (Q: Dec. 2014 )) / 2 ) / Revenue (Q: Dec. 2014 ) = ( (166.936 + 169.323) / 2 ) / 116.243 = 168.1295 / 116.243 = 1.45

* All numbers are in millions except for per share data and ratio. All numbers are in their own 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.

Molycorp Inc's Days Inventory for the three months ended in Dec. 2014 is calculated as:

 Days Inventory = Average Inventory (Q: Dec. 2014 ) / Cost of Goods Sold (Q: Dec. 2014 ) * Days in Period = 168.1295 / 161.085 * 365 / 4 = 95.24

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

Molycorp Inc's Days Sales of Inventory for the three months ended in Dec. 2014 is

 Days Sales of Inventory (DSI) = Average Inventory (Q: Dec. 2014 ) / Revenue (Q: Dec. 2014 ) * Days in Period = 168.1295 / 116.243 * 365 / 4 = 131.98

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

Molycorp Inc's Inventory Turnover for the quarter that ended in Dec. 2014 is calculated as

 Inventory Turnover = Cost of Goods Sold (Q: Dec. 2014 ) / Average Inventory (Q: Dec. 2014 ) = 161.085 / 168.1295 = 0.96

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Molycorp Inc Annual Data

 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 inventory2rev 0.00 0.00 0.00 0.00 0.00 0.41 0.17 0.38 0.41 0.36

Molycorp Inc Quarterly Data

 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 inventory2rev 1.46 2.13 1.83 1.69 1.33 1.44 1.43 1.49 1.41 1.45
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)