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National Grid PLC  (NYSE:NGG) Inventory Turnover: 16.56 (As of Mar. 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. National Grid PLC's Cost of Goods Sold for the six months ended in Mar. 2017 was \$7,919 Mil. National Grid PLC's Total Inventories for the quarter that ended in Mar. 2017 was \$478 Mil. National Grid PLC's inventory turnover for the quarter that ended in Mar. 2017 was 16.56.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. National Grid PLC's Days Inventory for the six months ended in Mar. 2017 was 11.02.

Total Inventories can be measured by Days Sales of Inventory (DSI). National Grid PLC's days sales of inventory (DSI) for the six months ended in Mar. 2017 was 9.03.

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. National Grid PLC's Inventory-to-Revenue for the quarter that ended in Mar. 2017 was 0.05.

Historical Data

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

National Grid PLC Annual Data

 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17 Inventory Turnover 32.80 46.93 40.34 31.87 34.40

National Grid PLC Semi-Annual Data

 Sep07 Mar08 Sep08 Mar09 Sep09 Mar10 Sep10 Mar11 Sep11 Mar12 Sep12 Mar13 Sep13 Mar14 Sep14 Mar15 Sep15 Mar16 Sep16 Mar17 Inventory Turnover 15.28 15.05 13.09 13.36 16.56

Calculation

National Grid PLC's Inventory Turnover for the fiscal year that ended in Mar. 2017 is calculated as

 Inventory Turnover (A: Mar. 2017 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (A: Mar. 2017 ) / ( (Total Inventories (A: Mar. 2016 ) + Total Inventories (A: Mar. 2017 )) / 2 ) = 14601.2345679 / ( (478.632478632 + 370.37037037) / 2 ) = 14601.2345679 / 424.501424501 = 34.40

National Grid PLC's Inventory Turnover for the quarter that ended in Mar. 2017 is calculated as

 Inventory Turnover (Q: Mar. 2017 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (Q: Mar. 2017 ) / ( (Total Inventories (Q: Sep. 20 ) + Total Inventories (Q: Mar. 2017 )) / 2 ) = 7918.51851852 / ( (586.070959264 + 370.37037037) / 2 ) = 7918.51851852 / 478.220664817 = 16.56

* 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.

National Grid PLC's Days Inventory for the six months ended in Mar. 2017 is calculated as:

 Days Inventory = Total Inventories (Q: Mar. 2017 ) / Cost of Goods Sold (Q: Mar. 2017 ) * Days in Period = 478.220664817 / 7918.51851852 * 365 / 2 = 11.02

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

National Grid PLC's Days Sales of Inventory for the six months ended in Mar. 2017 is calculated as:

 Days Sales of Inventory (DSI) = Total Inventories (Q: Mar. 2017 ) / Revenue (Q: Mar. 2017 ) * Days in Period = 478.220664817 / 9669.13580247 * 365 / 2 = 9.03

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.

National Grid PLC's Inventory to Revenue for the quarter that ended in Mar. 2017 is calculated as

 Inventory-to-Revenue = Total Inventories (Q: Mar. 2017 ) / Revenue (Q: Mar. 2017 ) = 478.220664817 / 9669.13580247 = 0.05

* 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