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National Grid PLC  (NYSE:NGG) Total Inventories: $370 Mil (As of Mar. 2017)

National Grid PLC's total inventories for the quarter that ended in Mar. 2017 was $370 Mil. National Grid PLC's average total inventories from the quarter that ended in Sep. 2016 to the quarter that ended in Mar. 2017 was $478 Mil.

In Ben Graham's calculation of liquidation value, inventory is only considered worth half of its book value. National Grid PLC's liquidation value for the quarter that ended in Mar. 2017 was $-42,282 Mil.

Inventory can be measured by days sales of inventory (DSI). National Grid PLC's days sales of inventory (DSI) for the six months ended in Mar. 2017 was 9.03.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. National Grid PLC's Days Inventory for the six months ended in Mar. 2017 was 11.02.

Inventory Turnover measures how fast the company turns over its inventory within a year. National Grid PLC's Inventory Turnover for the quarter that ended in Mar. 2017 was 16.56.

Inventory-to-Revenue determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue. National Grid PLC's Inventory-to-Revenue for the quarter that ended in Mar. 2017 was 0.05.


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.

National Grid PLC Annual Data

Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17
Total Inventories Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 426.85 357.14 414.05 478.63 370.37

National Grid PLC Semi-Annual Data

Sep07 Mar08 Sep08 Mar09 Sep09 Mar10 Sep10 Mar11 Sep11 Mar12 Sep12 Mar13 Sep13 Mar14 Sep14 Mar15 Sep15 Mar16 Sep16 Mar17
Total Inventories 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 414.05 605.83 478.63 586.07 370.37

Calculation

Total Inventories includes the raw materials, work-in-process goods and completely finished goods of a company. It is a portion of a company's current assets.


Explanation

Inventory control is an important part of business operation. If a company does not have enough inventory, it may not be able to meet customers' required delivery time. If it has too much inventory, the cost of holding the inventory can be high.

1. In Ben Graham's calculation of liquidation value, inventory is only considered worth half of its book value.

National Grid PLC's liquidation value for the quarter that ended in Mar. 2017 is

Liquidation value (Q: Mar. 2017 )
=Cash, Cash Equivalents, Marketable Securities-Total Liabilities+(0.75 * Accounts Receivable)+(0.5 * Total Inventories)
=12197.5308642-56138.2716049+0.75 * 1964.19753086+0.5 * 370.37037037
=-42,282

2. Inventory can be measured by Days Sales of Inventory (DSI).

National Grid PLC's Days Sales of Inventory for the six months ended in Mar. 2017 is

Days Sales of Inventory (DSI)
=Total Inventories (Q: Mar. 2017 )/Revenue (Q: Mar. 2017 )*Days in Period
=478.220664817/9669.13580247*365 / 2
=9.03

3. Days Inventory indicates the number of days of goods in sales that a company has in the inventory.

National Grid PLC's Days Inventory for the six months ended in Mar. 2017 is calculated as:

Days Inventory=Total Inventories (Q: Mar. 2017 )/Cost of Goods Sold (Q: Mar. 2017 )*Days in Period
=478.220664817/7918.51851852*365 / 2
=11.02

4. Inventory Turnover measures how fast the company turns over its inventory within a year.

National Grid PLC's Inventory Turnover for the quarter that ended in Mar. 2017 is calculated as

Inventory Turnover=Cost of Goods Sold (Q: Mar. 2017 ) / Total Inventories (Q: Mar. 2017 )
=7918.51851852 / 478.220664817
=16.56

5. Inventory-to-Revenue determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue.

National Grid PLC's Inventory to Revenue for the quarter that ended in Mar. 2017 is calculated as

Inventory-to-Revenue=Total Inventories (Q: Mar. 2017 ) / Revenue (Q: Mar. 2017 )
=478.220664817 / 9669.13580247
=0.05

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


Be Aware

Manufacturers with durable competitive advantages have the advantage that the products they sell do not change, and therefore will never become obsolete. Buffett likes this advantage.

When identifying manufacturers with durable competitive advantage, look for inventory and net earnings that rise correspondingly. This indicates that the company is finding profitable ways to increase sales which called for an increase in inventory.

Manufacturers with inventories that spike up and down are indicative of competitive industries subject to boom and bust.


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