Switch to:
Texas Instruments Inc  (NAS:TXN) Inventory Turnover: 0.61 (As of Mar. 2019)

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. Texas Instruments Inc's Cost of Goods Sold for the three months ended in Mar. 2019 was \$1,333 Mil. Texas Instruments Inc's Total Inventories for the quarter that ended in Mar. 2019 was \$2,174 Mil. Texas Instruments Inc's inventory turnover for the quarter that ended in Mar. 2019 was 0.61.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. Texas Instruments Inc's Days Inventory for the three months ended in Mar. 2019 was 148.82.

Total Inventories can be measured by Days Sales of Inventory (DSI). Texas Instruments Inc's days sales of inventory (DSI) for the three months ended in Mar. 2019 was 55.20.

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. Texas Instruments Inc's Inventory-to-Revenue for the quarter that ended in Mar. 2019 was 0.60.

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.

Texas Instruments Inc Annual Data

 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Inventory Turnover     3.20 3.12 2.94 2.85 2.64

Calculation

Texas Instruments Inc's Inventory Turnover for the fiscal year that ended in Dec. 2018 is calculated as

 Inventory Turnover (A: Dec. 2018 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (A: Dec. 2018 ) / ( (Total Inventories (A: Dec. 2017 ) + Total Inventories (A: Dec. 2018 )) / 2 ) = 5507 / ( (1957 + 2217) / 2 ) = 5507 / 2087 = 2.64

Texas Instruments Inc's Inventory Turnover for the quarter that ended in Mar. 2019 is calculated as

 Inventory Turnover (Q: Mar. 2019 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (Q: Mar. 2019 ) / ( (Total Inventories (Q: Dec. 2018 ) + Total Inventories (Q: Mar. 2019 )) / 2 ) = 1333 / ( (2217 + 2131) / 2 ) = 1333 / 2174 = 0.61

* 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.

Texas Instruments Inc's Days Inventory for the three months ended in Mar. 2019 is calculated as:

 Days Inventory = Total Inventories (Q: Mar. 2019 ) / Cost of Goods Sold (Q: Mar. 2019 ) * Days in Period = 2174 / 1333 * 365 / 4 = 148.82

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

Texas Instruments Inc's Days Sales of Inventory for the three months ended in Mar. 2019 is calculated as:

 Days Sales of Inventory (DSI) = Total Inventories (Q: Mar. 2019 ) / Revenue (Q: Mar. 2019 ) * Days in Period = 2174 / 3594 * 365 / 4 = 55.20

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.

Texas Instruments Inc's Inventory to Revenue for the quarter that ended in Mar. 2019 is calculated as

 Inventory-to-Revenue = Total Inventories (Q: Mar. 2019 ) / Revenue (Q: Mar. 2019 ) = 2174 / 3594 = 0.60

* 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

Headlines

No Headline

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)