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Q.E.P. Co Inc  (OTCPK:QEPC) Total Inventories: \$34.4 Mil (As of Feb. 2011)

Q.E.P. Co Inc's total inventories for the quarter that ended in Feb. 2011 was \$34.4 Mil. Q.E.P. Co Inc's average total inventories from the quarter that ended in Feb. 2010 to the quarter that ended in Feb. 2011 was \$32.5 Mil.

In Ben Graham's calculation of liquidation value, inventory is only considered worth half of its book value. Q.E.P. Co Inc's liquidation value for the quarter that ended in Feb. 2011 was \$-11.5 Mil.

Inventory can be measured by days sales of inventory (DSI). Q.E.P. Co Inc's days sales of inventory (DSI) for the six months ended in Feb. 2011 was 24.91.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. Q.E.P. Co Inc's Days Inventory for the six months ended in Feb. 2011 was 36.05.

Inventory Turnover measures how fast the company turns over its inventory within a year. Q.E.P. Co Inc's Inventory Turnover for the quarter that ended in Feb. 2011 was 5.06.

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. Q.E.P. Co Inc's Inventory-to-Revenue for the quarter that ended in Feb. 2011 was 0.14.

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.

Q.E.P. Co Inc Annual Data

 Feb02 Feb03 Feb04 Feb05 Feb06 Feb07 Feb08 Feb09 Feb10 Feb11 Total Inventories 27.04 26.50 24.45 30.49 34.45

Q.E.P. Co Inc Semi-Annual Data

 Feb96 Feb97 Feb98 Feb99 Feb00 Feb01 Feb02 Feb03 Feb04 Feb05 Feb06 Feb07 Feb08 Feb09 Feb10 Feb11 Total Inventories 27.04 26.50 24.45 30.49 34.45

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.

Q.E.P. Co Inc's liquidation value for the quarter that ended in Feb. 2011 is

 Liquidation value (Q: Feb. 2011 ) = Cash, Cash Equivalents, Marketable Securities - Total Liabilities + (0.75 * Accounts Receivable) + (0.5 * Total Inventories) = 0.447 - 52.655 + 0.75 * 31.35 + 0.5 * 34.447 = -11.5

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

Q.E.P. Co Inc's Days Sales of Inventory for the six months ended in Feb. 2011 is

 Days Sales of Inventory (DSI) = Total Inventories (Q: Feb. 2011 ) / Revenue (Q: Feb. 2011 ) * Days in Period = 32.466 / 237.886 * 365 / 2 = 24.91

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

Q.E.P. Co Inc's Days Inventory for the six months ended in Feb. 2011 is calculated as:

 Days Inventory = Total Inventories (Q: Feb. 2011 ) / Cost of Goods Sold (Q: Feb. 2011 ) * Days in Period = 32.466 / 164.334 * 365 / 2 = 36.05

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

Q.E.P. Co Inc's Inventory Turnover for the quarter that ended in Feb. 2011 is calculated as

 Inventory Turnover = Cost of Goods Sold (Q: Feb. 2011 ) / Total Inventories (Q: Feb. 2011 ) = 164.334 / 32.466 = 5.06

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.

Q.E.P. Co Inc's Inventory to Revenue for the quarter that ended in Feb. 2011 is calculated as

 Inventory-to-Revenue = Total Inventories (Q: Feb. 2011 ) / Revenue (Q: Feb. 2011 ) = 32.466 / 237.886 = 0.14

* 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.

Related Terms