Valiant Petroleum (LSE:VPP) Total Inventories : £5.8 Mil (As of Jun. 2012)

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What is Valiant Petroleum Total Inventories?

Valiant Petroleum's total inventories for the quarter that ended in Jun. 2012 was £5.8 Mil. Valiant Petroleum's average total inventories from the quarter that ended in Dec. 2011 to the quarter that ended in Jun. 2012 was £5.0 Mil.

In Ben Graham's calculation of Net-Net Working Capital, inventory is only considered worth half of its book value. Valiant Petroleum's Net-Net Working Capital per share for the quarter that ended in Jun. 2012 was £-4.41.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. Valiant Petroleum's Days Inventory for the six months ended in Jun. 2012 was 31.20.

Inventory Turnover measures how fast the company turns over its inventory within a year. Valiant Petroleum's Inventory Turnover for the quarter that ended in Jun. 2012 was 5.85.

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. Valiant Petroleum's Inventory-to-Revenue for the quarter that ended in Jun. 2012 was 0.08.

Valiant Petroleum Total Inventories Historical Data

The historical data trend for Valiant Petroleum'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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Valiant Petroleum Total Inventories Chart

Valiant Petroleum Annual Data

Trend

Sep06

Sep07

Dec08

Dec09

Dec10

Dec11

Total Inventories

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1.78

22.95

4.31

Valiant Petroleum Semi-Annual Data
	Mar08	Jun09	Dec09	Jun10	Dec10	Jun11	Dec11	Jun12
Total Inventories	Get a 7-Day Free Trial			12.01	22.95	9.32	4.31	5.76

Valiant Petroleum 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.

Valiant Petroleum (LSE:VPP) 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.

Valiant Petroleum's Net-Net Working Capital Per Share for the quarter that ended in Jun. 2012 is

	Net-Net Working Capital Per Share (Q: Jun. 2012 )
=	(Cash And Cash Equivalents	+	0.75 * Accounts Receivable	+	0.5 * Total Inventories	-	Total Liabilities
-	Preferred Stock	-	Minority Interest)	/	Shares Outstanding (EOP)
=	(25.982	+	0.75 * 0	+	0.5 * 5.762	-	214.276
-	0	-	0)	/	42.047
=	-4.41

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

Valiant Petroleum's Days Inventory for the six months ended in Jun. 2012 is calculated as:

Days Inventory	=	Average Total Inventories (Q: Jun. 2012 )	/	Cost of Goods Sold (Q: Jun. 2012 )	*	Days in Period
	=	5.038	/	29.47	*	365 / 2
	=	31.20

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

Valiant Petroleum's Inventory Turnover for the quarter that ended in Jun. 2012 is calculated as

Inventory Turnover	=	Cost of Goods Sold (Q: Jun. 2012 )	/	Average Total Inventories (Q: Jun. 2012 )
	=	29.47	/	5.038
	=	5.85

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.

Valiant Petroleum's Inventory to Revenue for the quarter that ended in Jun. 2012 is calculated as

Inventory-to-Revenue	=	Average Total Inventories (Q: Jun. 2012 )	/	Revenue (Q: Jun. 2012 )
	=	5.038	/	60.546
	=	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.

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