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Royal Dutch Shell PLC  (NYSE:RDS.A) Total Inventories: $22,318 Mil (As of Jun. 2017)

Royal Dutch Shell PLC's total inventories for the quarter that ended in Jun. 2017 was $22,318 Mil. Royal Dutch Shell PLC's average total inventories from the quarter that ended in Mar. 2017 to the quarter that ended in Jun. 2017 was $21,954 Mil.

In Ben Graham's calculation of liquidation value, inventory is only considered worth half of its book value. Royal Dutch Shell PLC's liquidation value for the quarter that ended in Jun. 2017 was $-151,286 Mil.

Inventory can be measured by days sales of inventory (DSI). Royal Dutch Shell PLC's days sales of inventory (DSI) for the three months ended in Jun. 2017 was 27.55.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. Royal Dutch Shell PLC's Days Inventory for the three months ended in Jun. 2017 was 33.29.

Inventory Turnover measures how fast the company turns over its inventory within a year. Royal Dutch Shell PLC's Inventory Turnover for the quarter that ended in Jun. 2017 was 2.74.

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. Royal Dutch Shell PLC's Inventory-to-Revenue for the quarter that ended in Jun. 2017 was 0.30.


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.

Royal Dutch Shell PLC Annual Data

Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
Total Inventories Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 30,781.00 30,009.00 19,701.00 15,822.00 21,775.00

Royal Dutch Shell PLC Quarterly Data

Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17
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 20,626.00 20,562.00 21,775.00 21,589.00 22,318.00

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.

Royal Dutch Shell PLC's liquidation value for the quarter that ended in Jun. 2017 is

Liquidation value (Q: Jun. 2017 )
=Cash, Cash Equivalents, Marketable Securities-Total Liabilities+(0.75 * Accounts Receivable)+(0.5 * Total Inventories)
=23992-217743+0.75 * 41742+0.5 * 22318
=-151,286

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

Royal Dutch Shell PLC's Days Sales of Inventory for the three months ended in Jun. 2017 is

Days Sales of Inventory (DSI)
=Total Inventories (Q: Jun. 2017 )/Revenue (Q: Jun. 2017 )*Days in Period
=21953.5/72702*365 / 4
=27.55

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

Royal Dutch Shell PLC's Days Inventory for the three months ended in Jun. 2017 is calculated as:

Days Inventory=Total Inventories (Q: Jun. 2017 )/Cost of Goods Sold (Q: Jun. 2017 )*Days in Period
=21953.5/60171*365 / 4
=33.29

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

Royal Dutch Shell PLC's Inventory Turnover for the quarter that ended in Jun. 2017 is calculated as

Inventory Turnover=Cost of Goods Sold (Q: Jun. 2017 ) / Total Inventories (Q: Jun. 2017 )
=60171 / 21953.5
=2.74

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.

Royal Dutch Shell PLC's Inventory to Revenue for the quarter that ended in Jun. 2017 is calculated as

Inventory-to-Revenue=Total Inventories (Q: Jun. 2017 ) / Revenue (Q: Jun. 2017 )
=21953.5 / 72702
=0.30

* 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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