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Poseidon Concepts Corp  (TSX:PSN) Cost of Goods Sold: C$20.4 Mil (TTM As of Sep. 2012)

Poseidon Concepts Corp's cost of goods sold for the three months ended in Sep. 2012 was C$9.1 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Sep. 2012 was C$20.4 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Poseidon Concepts Corp's Gross Margin % for the three months ended in Sep. 2012 was 77.94%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Poseidon Concepts Corp's Inventory Turnover for the three months ended in Sep. 2012 was 1.40.


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.

Poseidon Concepts Corp Annual Data

Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11
Cost of Goods Sold Premium Member Only Premium Member Only 6.04 13.30 8.63 0.62 9.62

Poseidon Concepts Corp Quarterly Data

Dec06 Dec07 Dec08 Dec09 Mar10 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12
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 2.66 3.28 4.71 3.33 9.07

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 Sep. 2012 was 3.277 (Dec. 2011 ) + 4.709 (Mar. 2012 ) + 3.329 (Jun. 2012 ) + 9.069 (Sep. 2012 ) = C$20.4 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.

Poseidon Concepts Corp's Gross Margin % for the three months ended in Sep. 2012 is calculated as:

Gross Margin %=(Revenue - Cost of Goods Sold) / Revenue
=(41.116 - 9.069) / 41.116
=77.94 %

* 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:

Poseidon Concepts Corp's Inventory Turnover for the three months ended in Sep. 2012 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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