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Sycamore Networks Inc  (OTCPK:SCMR) Cost of Goods Sold: $21.56 Mil (TTM As of Jan. 2013)

Sycamore Networks Inc's cost of goods sold for the three months ended in Jan. 2013 was $4.02 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Jan. 2013 was $21.56 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Sycamore Networks Inc's Gross Margin % for the three months ended in Jan. 2013 was 57.54%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Sycamore Networks Inc's Inventory Turnover for the three months ended in Jan. 2013 was 0.45.


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.

Sycamore Networks Inc Annual Data

Jul03 Jul04 Jul05 Jul06 Jul07 Jul08 Jul09 Jul10 Jul11 Jul12
Cost of Goods Sold Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 62.57 38.47 30.95 22.51 24.33

Sycamore Networks Inc Quarterly Data

Apr08 Jul08 Oct08 Jan09 Apr09 Jul09 Oct09 Jan10 Apr10 Jul10 Oct10 Jan11 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13
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 5.44 5.46 7.18 4.90 4.02

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 Jan. 2013 was 5.455 (Apr. 2012 ) + 7.179 (Jul. 2012 ) + 4.903 (Oct. 2012 ) + 4.021 (Jan. 2013 ) = $21.56 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.

Sycamore Networks Inc's Gross Margin % for the three months ended in Jan. 2013 is calculated as:

Gross Margin %=(Revenue - Cost of Goods Sold) / Revenue
=(9.47 - 4.021) / 9.47
=57.54 %

* 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:

Sycamore Networks Inc's Inventory Turnover for the three months ended in Jan. 2013 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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