Forge Group (ASX:FGE) Total Inventories : A$150 Mil (As of Jun. 2013)

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What is Forge Group Total Inventories?

Forge Group's total inventories for the quarter that ended in Jun. 2013 was A$150 Mil. Forge Group's average total inventories from the quarter that ended in Jun. 2012 to the quarter that ended in Jun. 2013 was A$81 Mil.

In Ben Graham's calculation of Net-Net Working Capital, inventory is only considered worth half of its book value. Forge Group's Net-Net Working Capital per share for the quarter that ended in Jun. 2013 was A$-0.95.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. Forge Group's Days Inventory for the six months ended in Jun. 2013 was 22.50.

Inventory Turnover measures how fast the company turns over its inventory within a year. Forge Group's Inventory Turnover for the quarter that ended in Jun. 2013 was 8.11.

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. Forge Group's Inventory-to-Revenue for the quarter that ended in Jun. 2013 was 0.08.

Forge Group Total Inventories Historical Data

The historical data trend for Forge Group's Total Inventories 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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Forge Group Total Inventories Chart

Forge Group Annual Data

Trend

Jun07

Jun08

Jun09

Jun10

Jun11

Jun12

Jun13

Total Inventories

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4.93

14.62

29.62

11.33

150.49

Forge Group Semi-Annual Data
	Jun07	Jun08	Jun09	Jun10	Jun11	Jun12	Jun13
Total Inventories	Get a 7-Day Free Trial			4.93	14.62	29.62	11.33	150.49

Forge Group Total Inventories Calculation

Total Inventories includes the raw materials, work-in-process goods and completely finished goods of a company. It is a portion of a company's current assets.

Forge Group (ASX:FGE) Total Inventories Explanation

Inventory control is an important part of business operation. If a company does not have enough inventory, it may not be able to meet customers' required delivery time. If it has too much inventory, the cost of holding the inventory can be high.

1. In Ben Graham's calculation of Net-Net Working Capital (NNWC), inventory is only considered worth half of its book value.

Forge Group's Net-Net Working Capital Per Share for the quarter that ended in Jun. 2013 is

	Net-Net Working Capital Per Share (Q: Jun. 2013 )
=	(Cash And Cash Equivalents	+	0.75 * Accounts Receivable	+	0.5 * Total Inventories	-	Total Liabilities
-	Preferred Stock	-	Minority Interest)	/	Shares Outstanding (EOP)
=	(93.476	+	0.75 * 0	+	0.5 * 150.491	-	250.784
-	0	-	0)	/	86.307
=	-0.95

2. Days Inventory indicates the number of days of goods in sales that a company has in the inventory.

Forge Group's Days Inventory for the six months ended in Jun. 2013 is calculated as:

Days Inventory	=	Average Total Inventories (Q: Jun. 2013 )	/	Cost of Goods Sold (Q: Jun. 2013 )	*	Days in Period
	=	80.911	/	656.334	*	365 / 2
	=	22.50

3. Inventory Turnover measures how fast the company turns over its inventory within a year.

Forge Group's Inventory Turnover for the quarter that ended in Jun. 2013 is calculated as

Inventory Turnover	=	Cost of Goods Sold (Q: Jun. 2013 )	/	Average Total Inventories (Q: Jun. 2013 )
	=	656.334	/	80.911
	=	8.11

4. 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.

Forge Group's Inventory to Revenue for the quarter that ended in Jun. 2013 is calculated as

Inventory-to-Revenue	=	Average Total Inventories (Q: Jun. 2013 )	/	Revenue (Q: Jun. 2013 )
	=	80.911	/	1054.1
	=	0.08

Be Aware

Manufacturers with durable competitive advantages have the advantage that the products they sell do not change, and therefore will never become obsolete. Buffett likes this advantage.

When identifying manufacturers with durable competitive advantage, look for inventory and net earnings that rise correspondingly. This indicates that the company is finding profitable ways to increase sales which called for an increase in inventory.

Manufacturers with inventories that spike up and down are indicative of competitive industries subject to boom and bust.

Forge Group Total Inventories Related Terms

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Forge Group (ASX:FGE) Business Description

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http://www.forgegroup.com.au

Forge Group Ltd provides construction, commercial building, engineering, maintenance and workshop fabrication services. Its operations are segmented into four areas - Minerals & Resources, Power, Construction and Asset Management. The Minerals & Resources segment provides a wide range of engineering, design and construction services for the mining and metals sector. The Power segment provides turnkey power generation solutions to the energy and utilities sectors. The Construction segment offers a suite of construction services that covers all disciplines including heavy civil, structural, mechanical, piping, tanks, electrical, instrumentation, and building. Further, the Asset Management segment offers various asset management services. The Company has operational footprints across Australia, North America, Africa and Asia.

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