Formosa Petrochemical (TPE:6505) Inventory Turnover : 2.06 (As of Dec. 2023)

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What is Formosa Petrochemical Inventory Turnover?

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. Formosa Petrochemical's Cost of Goods Sold for the three months ended in Dec. 2023 was NT$173,497 Mil. Formosa Petrochemical's Average Total Inventories for the quarter that ended in Dec. 2023 was NT$84,095 Mil. Formosa Petrochemical's Inventory Turnover for the quarter that ended in Dec. 2023 was 2.06.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. Formosa Petrochemical's Days Inventory for the three months ended in Dec. 2023 was 44.23.

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. Formosa Petrochemical's Inventory-to-Revenue for the quarter that ended in Dec. 2023 was 0.48.

Formosa Petrochemical Inventory Turnover Historical Data

The historical data trend for Formosa Petrochemical's Inventory Turnover can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Formosa Petrochemical Inventory Turnover Chart

Formosa Petrochemical Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Inventory Turnover

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9.87

7.49

9.26

10.46

8.41

Formosa Petrochemical Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Inventory Turnover	Get a 7-Day Free Trial															2.23	2.22	2.13	2.00	2.06

Formosa Petrochemical Inventory Turnover Calculation

Formosa Petrochemical's Inventory Turnover for the fiscal year that ended in Dec. 2023 is calculated as

	Inventory Turnover (A: Dec. 2023 )
=	Cost of Goods Sold	/	Average Total Inventories
=	Cost of Goods Sold (A: Dec. 2023 )	/ (	(Total Inventories (A: Dec. 2022 )	+	Total Inventories (A: Dec. 2023 ))	/	count )
=	685553.532	/ (	(86407.87	+	76657.73)	/	2 )
=	685553.532	/	81532.8
=	8.41

Formosa Petrochemical's Inventory Turnover for the quarter that ended in Dec. 2023 is calculated as

	Inventory Turnover (Q: Dec. 2023 )
=	Cost of Goods Sold	/	Average Total Inventories
=	Cost of Goods Sold (Q: Dec. 2023 )	/ (	(Total Inventories (Q: Sep. 2023 )	+	Total Inventories (Q: Dec. 2023 ))	/	count )
=	173496.997	/ (	(91533.134	+	76657.73)	/	2 )
=	173496.997	/	84095.432
=	2.06

Formosa Petrochemical (TPE:6505) Inventory Turnover 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.

Formosa Petrochemical's Days Inventory for the three months ended in Dec. 2023 is calculated as:

Days Inventory	=	Average Total Inventories (Q: Dec. 2023 )	/	Cost of Goods Sold (Q: Dec. 2023 )	*	Days in Period
	=	84095.432	/	173496.997	*	365 / 4
	=	44.23

2. 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.

Formosa Petrochemical's Inventory to Revenue for the quarter that ended in Dec. 2023 is calculated as

Inventory-to-Revenue	=	Average Total Inventories (Q: Dec. 2023 )	/	Revenue (Q: Dec. 2023 )
	=	84095.432	/	175878.253
	=	0.48

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.

Formosa Petrochemical Inventory Turnover Related Terms

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Formosa Petrochemical (TPE:6505) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » Formosa Petrochemical Corp (TPE:6505) » Definitions » Inventory Turnover

Comparable Companies

Traded in Other Exchanges

N/A

Address

No. 1-1, Formosa Plastics Industrial Park, Zhongxing Village, Mailiao Township, Yunlin County, Taipei, TWN, 638

Website

http://www.fpcc.com.tw

Formosa Petrochemical Corp engages in refining crude oil, selling refined petroleum products, and producing and selling olefins. The firm operates in two segments. The Petrochemical segment that derives majority revenue engages in producing and selling petroleum, and petrochemical products. The Public utility segment engages in producing and selling water, electricity, and steam. Its product offerings comprise gasoline, jet fuel, kerosene, fuel oil, asphalt, sulfur, lubricant, diesel, naphtha, and liquid petroleum gas.

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