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Richardson Electronics Ltd  (NAS:RELL) Cost of Goods Sold: $94.7 Mil (TTM As of Aug. 2017)

Richardson Electronics Ltd's cost of goods sold for the three months ended in Aug. 2017 was $24.8 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Aug. 2017 was $94.7 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Richardson Electronics Ltd's Gross Margin % for the three months ended in Aug. 2017 was 32.84%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Richardson Electronics Ltd's Inventory Turnover for the three months ended in Aug. 2017 was 0.56.


Historical Data

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

* Premium members only.

Richardson Electronics Ltd Annual Data

May08 May09 May10 May11 May12 May13 May14 May15 May16 May17
Cost of Goods Sold Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 99.52 96.95 95.82 97.18 92.99

Richardson Electronics Ltd Quarterly Data

Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17
Cost of Goods Sold 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 Premium Member Only Premium Member Only Premium Member Only 23.13 22.86 21.62 25.37 24.85

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 Aug. 2017 was 22.863 (Nov. 2016 ) + 21.621 (Feb. 2017 ) + 25.372 (May. 2017 ) + 24.847 (Aug. 2017 ) = $94.7 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.

Richardson Electronics Ltd's Gross Margin % for the three months ended in Aug. 2017 is calculated as:

Gross Margin %=(Revenue - Cost of Goods Sold) / Revenue
=(36.995 - 24.847) / 36.995
=32.84 %

* 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:

Richardson Electronics Ltd's Inventory Turnover for the three months ended in Aug. 2017 is calculated as:

* 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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