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Diageo PLC  (NYSE:DEO) Inventory Turnover: 0.47 (As of Jun. 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. Diageo PLC's Cost of Goods Sold for the six months ended in Jun. 2017 was $2,836 Mil. Diageo PLC's Total Inventories for the quarter that ended in Jun. 2017 was $6,025 Mil. Diageo PLC's inventory turnover for the quarter that ended in Jun. 2017 was 0.47.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. Diageo PLC's Days Inventory for the six months ended in Jun. 2017 was 387.68.

Total Inventories can be measured by Days Sales of Inventory (DSI). Diageo PLC's days sales of inventory (DSI) for the six months ended in Jun. 2017 was 152.55.

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. Diageo PLC's Inventory-to-Revenue for the quarter that ended in Jun. 2017 was 0.84.


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.

Diageo PLC Annual Data

Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17
Inventory Turnover Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.08 1.00 1.01 0.89 0.95

Diageo PLC Semi-Annual Data

Dec07 Jun08 Dec08 Jun09 Dec09 Jun10 Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17
Inventory Turnover 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 0.47 0.50 0.43 0.50 0.47

Calculation

Diageo PLC's Inventory Turnover for the fiscal year that ended in Jun. 2017 is calculated as

Inventory Turnover (A: Jun. 2017 )
=Cost of Goods Sold / Total Inventories
=Cost of Goods Sold (A: Jun. 2017 ) / ((Total Inventories (A: Jun. 2016 ) + Total Inventories (A: Jun. 2017 )) / 2 )
=5992.31754161 / ((6504.26136364 + 6130.60179257) / 2 )
=5992.31754161 / 6317.4315781
=0.95

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

Inventory Turnover (Q: Jun. 2017 )
=Cost of Goods Sold / Total Inventories
=Cost of Goods Sold (Q: Jun. 2017 ) / ((Total Inventories (Q: Dec. 2016 ) + Total Inventories (Q: Jun. 2017 )) / 2 )
=2836.10755442 / ((5918.85143571 + 6130.60179257) / 2 )
=2836.10755442 / 6024.72661414
=0.47

* 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.

Diageo PLC's Days Inventory for the six 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
=6024.72661414/2836.10755442*365 / 2
=387.68

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

Diageo PLC's Days Sales of Inventory for the six months ended in Jun. 2017 is calculated as:

Days Sales of Inventory (DSI)=Total Inventories (Q: Jun. 2017 )/Revenue (Q: Jun. 2017 )*Days in Period
=6024.72661414/7207.42637644*365 / 2
=152.55

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.

Diageo 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 )
=6024.72661414 / 7207.42637644
=0.84

* 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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