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Conagra Brands Inc  (NYSE:CAG) Inventory Turnover: 1.35 (As of May. 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. Conagra Brands Inc's Cost of Goods Sold for the three months ended in May. 2017 was \$1,333 Mil. Conagra Brands Inc's Total Inventories for the quarter that ended in May. 2017 was \$990 Mil. Conagra Brands Inc's inventory turnover for the quarter that ended in May. 2017 was 1.35.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. Conagra Brands Inc's Days Inventory for the three months ended in May. 2017 was 67.81.

Total Inventories can be measured by Days Sales of Inventory (DSI). Conagra Brands Inc's days sales of inventory (DSI) for the three months ended in May. 2017 was 48.54.

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. Conagra Brands Inc's Inventory-to-Revenue for the quarter that ended in May. 2017 was 0.53.

Historical Data

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

Conagra Brands Inc Annual Data

 May08 May09 May10 May11 May12 May13 May14 May15 May16 May17 Inventory Turnover 4.80 4.03 3.62 4.64 5.54

Conagra Brands Inc Quarterly Data

 Aug12 Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Inventory Turnover 1.02 1.45 1.05 1.26 1.35

Calculation

Conagra Brands Inc's Inventory Turnover for the fiscal year that ended in May. 2017 is calculated as

 Inventory Turnover (A: May. 2017 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (A: May. 2017 ) / ( (Total Inventories (A: May. 2016 ) + Total Inventories (A: May. 2017 )) / 2 ) = 5484.8 / ( (1044.1 + 934.2) / 2 ) = 5484.8 / 989.15 = 5.54

Conagra Brands Inc's Inventory Turnover for the quarter that ended in May. 2017 is calculated as

 Inventory Turnover (Q: May. 2017 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (Q: May. 2017 ) / ( (Total Inventories (Q: Feb. 2017 ) + Total Inventories (Q: May. 2017 )) / 2 ) = 1332.7 / ( (1046.4 + 934.2) / 2 ) = 1332.7 / 990.3 = 1.35

* 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.

Conagra Brands Inc's Days Inventory for the three months ended in May. 2017 is calculated as:

 Days Inventory = Total Inventories (Q: May. 2017 ) / Cost of Goods Sold (Q: May. 2017 ) * Days in Period = 990.3 / 1332.7 * 365 / 4 = 67.81

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

Conagra Brands Inc's Days Sales of Inventory for the three months ended in May. 2017 is calculated as:

 Days Sales of Inventory (DSI) = Total Inventories (Q: May. 2017 ) / Revenue (Q: May. 2017 ) * Days in Period = 990.3 / 1861.7 * 365 / 4 = 48.54

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.

Conagra Brands Inc's Inventory to Revenue for the quarter that ended in May. 2017 is calculated as

 Inventory-to-Revenue = Total Inventories (Q: May. 2017 ) / Revenue (Q: May. 2017 ) = 990.3 / 1861.7 = 0.53

* 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.

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