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Analog Devices Inc  (NAS:ADI) Inventory Turnover: 1.00 (As of Oct. 2017)

Inventory turnover measures how fast the company turns over its inventory within a year. It is calculated as Cost of Goods Sold divided by Total Inventories. Analog Devices Inc's Cost of Goods Sold for the three months ended in Oct. 2017 was \$535 Mil. Analog Devices Inc's Total Inventories for the quarter that ended in Oct. 2017 was \$535 Mil. Analog Devices Inc's inventory turnover for the quarter that ended in Oct. 2017 was 1.00.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. Analog Devices Inc's Days Inventory for the three months ended in Oct. 2017 was 91.27.

Total Inventories can be measured by Days Sales of Inventory (DSI). Analog Devices Inc's days sales of inventory (DSI) for the three months ended in Oct. 2017 was 31.69.

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. Analog Devices Inc's Inventory-to-Revenue for the quarter that ended in Oct. 2017 was 0.35.

Historical Data

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

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Analog Devices Inc Annual Data

 Oct08 Oct09 Oct10 Oct11 Oct12 Oct13 Oct14 Oct15 Oct16 Oct17 Inventory Turnover 3.15 3.18 3.01 3.03 4.41

Analog Devices Inc Quarterly Data

 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17 Inventory Turnover 0.88 0.91 1.00 1.14 1.00

Calculation

Analog Devices Inc's Inventory Turnover for the fiscal year that ended in Oct. 2017 is calculated as

 Inventory Turnover (A: Oct. 2017 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (A: Oct. 2017 ) / ( (Total Inventories (A: Oct. 2016 ) + Total Inventories (A: Oct. 2017 )) / 2 ) = 2045.907 / ( (376.555 + 550.816) / 2 ) = 2045.907 / 463.6855 = 4.41

Analog Devices Inc's Inventory Turnover for the quarter that ended in Oct. 2017 is calculated as

 Inventory Turnover (Q: Oct. 2017 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (Q: Oct. 2017 ) / ( (Total Inventories (Q: Jul. 2017 ) + Total Inventories (Q: Oct. 2017 )) / 2 ) = 535.145 / ( (519.695 + 550.816) / 2 ) = 535.145 / 535.2555 = 1.00

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

Explanation

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.

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

Analog Devices Inc's Days Inventory for the three months ended in Oct. 2017 is calculated as:

 Days Inventory = Total Inventories (Q: Oct. 2017 ) / Cost of Goods Sold (Q: Oct. 2017 ) * Days in Period = 535.2555 / 535.145 * 365 / 4 = 91.27

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

Analog Devices Inc's Days Sales of Inventory for the three months ended in Oct. 2017 is calculated as:

 Days Sales of Inventory (DSI) = Total Inventories (Q: Oct. 2017 ) / Revenue (Q: Oct. 2017 ) * Days in Period = 535.2555 / 1541.17 * 365 / 4 = 31.69

3. 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.

Analog Devices Inc's Inventory to Revenue for the quarter that ended in Oct. 2017 is calculated as

 Inventory-to-Revenue = Total Inventories (Q: Oct. 2017 ) / Revenue (Q: Oct. 2017 ) = 535.2555 / 1541.17 = 0.35

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

Be Aware

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.

Related Terms