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Layne Christensen Co  (NAS:LAYN) Cost of Goods Sold: \$492.7 Mil (TTM As of Oct. 2017)

Layne Christensen Co's cost of goods sold for the three months ended in Oct. 2017 was \$100.1 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Oct. 2017 was \$492.7 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Layne Christensen Co's Gross Margin % for the three months ended in Oct. 2017 was 21.41%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Layne Christensen Co's Inventory Turnover for the three months ended in Oct. 2017 was 4.94.

Historical Data

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

Layne Christensen Co Annual Data

 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17 Cost of Goods Sold 836.39 645.08 610.84 570.08 502.05

Layne Christensen Co Quarterly Data

 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17 Cost of Goods Sold 97.12 207.39 86.28 98.87 100.14

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 Oct. 2017 was 207.39 (Jan. 2017 ) + 86.283 (Apr. 2017 ) + 98.869 (Jul. 2017 ) + 100.14 (Oct. 2017 ) = \$492.7 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.

Layne Christensen Co's Gross Margin % for the three months ended in Oct. 2017 is calculated as:

 Gross Margin % = (Revenue - Cost of Goods Sold) / Revenue = (127.423 - 100.14) / 127.423 = 21.41 %

* 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.

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

Layne Christensen Co's Inventory Turnover for the three months ended in Oct. 2017 is calculated as:

 Inventory Turnover = Cost of Goods Sold / Total Inventories = 100.14 / 20.2635 = 4.94

* 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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