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Tesco PLC  (OTCPK:TSCDY) Inventory Turnover: 10.97 (As of Feb. 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. Tesco PLC's Cost of Goods Sold for the six months ended in Feb. 2017 was \$33,775 Mil. Tesco PLC's Total Inventories for the quarter that ended in Feb. 2017 was \$3,080 Mil. Tesco PLC's inventory turnover for the quarter that ended in Feb. 2017 was 10.97.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. Tesco PLC's Days Inventory for the six months ended in Feb. 2017 was 16.64.

Total Inventories can be measured by Days Sales of Inventory (DSI). Tesco PLC's days sales of inventory (DSI) for the six months ended in Feb. 2017 was 15.73.

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. Tesco PLC's Inventory-to-Revenue for the quarter that ended in Feb. 2017 was 0.09.

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.

Tesco PLC Annual Data

 Feb08 Feb09 Feb10 Feb11 Feb12 Feb13 Feb14 Feb15 Feb16 Feb17 Inventory Turnover 15.98 16.83 17.35 18.23 20.88

Tesco PLC Semi-Annual Data

 Aug07 Feb08 Aug08 Feb09 Aug09 Feb10 Aug10 Feb11 Aug11 Feb12 Aug12 Feb13 Aug13 Feb14 Aug14 Feb15 Aug15 Feb16 Aug16 Feb17 Inventory Turnover 9.41 9.29 9.61 10.09 10.97

Calculation

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

 Inventory Turnover (A: Feb. 2017 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (A: Feb. 2017 ) / ( (Total Inventories (A: Feb. 2016 ) + Total Inventories (A: Feb. 2017 )) / 2 ) = 66268.75 / ( (3471.42857143 + 2876.25) / 2 ) = 66268.75 / 3173.83928571 = 20.88

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

 Inventory Turnover (Q: Feb. 2017 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (Q: Feb. 2017 ) / ( (Total Inventories (Q: Aug. 20 ) + Total Inventories (Q: Feb. 2017 )) / 2 ) = 33775 / ( (3283.09305374 + 2876.25) / 2 ) = 33775 / 3079.67152687 = 10.97

* 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.

Tesco PLC's Days Inventory for the six months ended in Feb. 2017 is calculated as:

 Days Inventory = Total Inventories (Q: Feb. 2017 ) / Cost of Goods Sold (Q: Feb. 2017 ) * Days in Period = 3079.67152687 / 33775 * 365 / 2 = 16.64

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

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

 Days Sales of Inventory (DSI) = Total Inventories (Q: Feb. 2017 ) / Revenue (Q: Feb. 2017 ) * Days in Period = 3079.67152687 / 35723.75 * 365 / 2 = 15.73

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.

Tesco PLC's Inventory to Revenue for the quarter that ended in Feb. 2017 is calculated as

 Inventory-to-Revenue = Total Inventories (Q: Feb. 2017 ) / Revenue (Q: Feb. 2017 ) = 3079.67152687 / 35723.75 = 0.09

* 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