Covance (FRA:CVD) Cost of Goods Sold : €1,431 Mil (TTM As of Sep. 2014)

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What is Covance Cost of Goods Sold?

Covance's cost of goods sold for the three months ended in Sep. 2014 was €369 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Sep. 2014 was €1,431 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. Covance's Gross Margin % for the three months ended in Sep. 2014 was 29.22%.

Cost of Goods Sold is also directly linked to Inventory Turnover. Covance's Inventory Turnover for the three months ended in Sep. 2014 was 9.39.

Covance Cost of Goods Sold Historical Data

The historical data trend for Covance's Cost of Goods Sold 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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Covance Cost of Goods Sold Chart

Covance Annual Data

Trend

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Dec13

Cost of Goods Sold

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876.12

1,019.47

1,114.96

1,337.59

1,376.04

Covance Quarterly Data
	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14
Cost of Goods Sold	Get a 7-Day Free Trial															347.96	352.98	346.16	363.81	368.54

Covance Cost of Goods Sold Calculation

Cost of Goods Sold is the aggregate cost of goods produced and sold, and services rendered during the reporting period. It excludes Total Operating Expense, such as Depreciation, Depletion and Amortization and Selling, General, & Admin. Expense.

Cost of Goods Sold for the trailing twelve months (TTM) ended in Sep. 2014 adds up the quarterly data reported by the company within the most recent 12 months, which was €1,431 Mil.

Covance (FRA:CVD) Cost of Goods Sold Explanation

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin.

Covance's Gross Margin % for the three months ended in Sep. 2014 is calculated as:

Gross Margin %	=	(Revenue	-	Cost of Goods Sold)	/	Revenue
	=	(520.694	-	368.544)	/	520.694
	=	29.22 %

A company that has a moat can usually maintain or even expand their Gross Margin. A company can increase its Gross Margin in two ways. It can increase the prices of the goods it sells and keeps its Cost of Goods Sold unchanged. Or it can keep the sales price unchanged and squeeze its suppliers to reduce the Cost of Goods Sold. Warren Buffett believes businesses with the power to raise prices have moats.

Cost of Goods Sold is also directly linked to another concept called Inventory Turnover:

Covance's Inventory Turnover for the three months ended in Sep. 2014 is calculated as:

Inventory Turnover	=	Cost of Goods Sold	/	Average Total Inventories
	=	368.544	/	39.2615
	=	9.39

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.

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.

Covance Cost of Goods Sold Related Terms

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Covance (FRA:CVD) Business Description

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GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Diagnostics & Research » Covance Inc (FRA:CVD) » Definitions » Cost of Goods Sold

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Website

http://www.covance.com

Covance, Inc is a Delaware Corporation, founded in 1987. The Company is a drug development services company providing early-stage and late-stage product development services mainly to the pharmaceutical, biotechnology and medical device industries. It also provides laboratory testing services to the chemical, agrochemical and food industries. Its two reportable segments are early development services, which include discovery support services, preclinical services and clinical pharmacology services; and late-stage development services, which include central laboratory, Phase II-IV clinical development, and market access services. The Company's preclinical services include toxicology services, pharmaceutical chemistry and related services. The Company's preclinical area has been a source of innovation by introducing new technologies for client access to data such as StudyTracker, electronic animal identification, multimedia study reports and animal and test tube measures of induced cell proliferation or reproduction. The Company's preclinical toxicology services include in vivo toxicology studies, which are studies of the effects of drugs in animals, genetic toxicology studies, which include studies of the effects of drugs on chromosomes, as well as on genetically modified mice and other specialized toxicology services. In its pharmaceutical chemistry services, it determines the metabolic profile and bioavailability of drug candidates. It also provides laboratory testing services to the chemical, agricultural chemical and food industries. The Company offers services to agricultural chemical manufacturers to determine the potential risk to humans, animals and the environment from plant protection products such as pesticides. In its nutritional chemistry services, the Company offers a range of services to the food, nutriceutical and animal feed industries, including nutritional analysis and equivalency, nutritional content fact labels, microbiological and chemical contaminant safety analysis, pesticide screening and stability testing. It provides custom polyclonal and monoclonal antibody services for research purposes and purpose-bred animals for biomedical research. The Company provides optimization and translational services including custom immunology and monoclonal antibody services, metabolism studies and pharmacokinetic screening as well as non-GLP toxicology, in vivo pharmacology, imaging services and biomarker services. The Company's bioanalytical testing services helps determine the appropriate dose and frequency of drug application from late discovery evaluation through Phase III clinical testing on a full-scale, globally integrated basis. The Company provides clinical pharmacology services, including first-in-human trials, of new pharmaceuticals at its seven clinics located throughout the United States and its one clinic in Leeds, United Kingdom. The Company offers reimbursement and healthcare economics consulting services

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