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Brown-Forman Corp  (NYSE:BF.B) Cost of Goods Sold: \$995 Mil (TTM As of Jul. 2017)

Brown-Forman Corp's cost of goods sold for the three months ended in Jul. 2017 was \$230 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Jul. 2017 was \$995 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Brown-Forman Corp's Gross Margin % for the three months ended in Jul. 2017 was 68.19%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Brown-Forman Corp's Inventory Turnover for the three months ended in Jul. 2017 was 0.18.

Historical Data

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

Brown-Forman Corp Annual Data

 Apr08 Apr09 Apr10 Apr11 Apr12 Apr13 Apr14 Apr15 Apr16 Apr17 Cost of Goods Sold 894.00 913.00 951.00 945.00 973.00

Brown-Forman Corp Quarterly Data

 Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Cost of Goods Sold 208.00 278.00 272.00 215.00 230.00

Calculation

Cost of goods sold (COGS) refers to the Total Inventories costs of those goods a business has sold during a particular period.

Cost of Goods Sold for the trailing twelve months (TTM) ended in Jul. 2017 was 278 (Oct. 2016 ) + 272 (Jan. 2017 ) + 215 (Apr. 2017 ) + 230 (Jul. 2017 ) = \$995 Mil.

* 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.

Brown-Forman Corp's Gross Margin % for the three months ended in Jul. 2017 is calculated as:

 Gross Margin % = (Revenue - Cost of Goods Sold) / Revenue = (723 - 230) / 723 = 68.19 %

* 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.

Cost of Goods Sold is also directly linked to another concept called Inventory Turnover:

Brown-Forman Corp's Inventory Turnover for the three months ended in Jul. 2017 is calculated as:

 Inventory Turnover = Cost of Goods Sold / Total Inventories = 230 / 1303.5 = 0.18

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

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.

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.

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