CHME (China Medicine) Inventory Turnover : 2.41 (As of Sep. 2010)

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What is China Medicine Inventory Turnover?

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. China Medicine's Cost of Goods Sold for the three months ended in Sep. 2010 was $11.75 Mil. China Medicine's Average Total Inventories for the quarter that ended in Sep. 2010 was $4.88 Mil. China Medicine's Inventory Turnover for the quarter that ended in Sep. 2010 was 2.41.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. China Medicine's Days Inventory for the three months ended in Sep. 2010 was 37.87.

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. China Medicine's Inventory-to-Revenue for the quarter that ended in Sep. 2010 was 0.28.

China Medicine Inventory Turnover Historical Data

The historical data trend for China Medicine's Inventory Turnover 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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China Medicine Inventory Turnover Chart

China Medicine Annual Data

Trend

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Inventory Turnover

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8.07

9.15

10.16

8.78

12.28

China Medicine Quarterly Data
	Dec05	Mar06	Jun06	Sep06	Dec06	Mar07	Jun07	Sep07	Dec07	Mar08	Jun08	Sep08	Dec08	Mar09	Jun09	Sep09	Dec09	Mar10	Jun10	Sep10
Inventory Turnover	Get a 7-Day Free Trial															1.67	2.55	2.28	2.92	2.41

China Medicine Inventory Turnover Calculation

China Medicine's Inventory Turnover for the fiscal year that ended in Dec. 2009 is calculated as

	Inventory Turnover (A: Dec. 2009 )
=	Cost of Goods Sold	/	Average Total Inventories
=	Cost of Goods Sold (A: Dec. 2009 )	/ (	(Total Inventories (A: Dec. 2008 )	+	Total Inventories (A: Dec. 2009 ))	/	count )
=	45.767	/ (	(4.725	+	2.731)	/	2 )
=	45.767	/	3.728
=	12.28

China Medicine's Inventory Turnover for the quarter that ended in Sep. 2010 is calculated as

	Inventory Turnover (Q: Sep. 2010 )
=	Cost of Goods Sold	/	Average Total Inventories
=	Cost of Goods Sold (Q: Sep. 2010 )	/ (	(Total Inventories (Q: Jun. 2010 )	+	Total Inventories (Q: Sep. 2010 ))	/	count )
=	11.746	/ (	(3.883	+	5.867)	/	2 )
=	11.746	/	4.875
=	2.41

China Medicine (OTCPK:CHME) Inventory Turnover 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.

China Medicine's Days Inventory for the three months ended in Sep. 2010 is calculated as:

Days Inventory	=	Average Total Inventories (Q: Sep. 2010 )	/	Cost of Goods Sold (Q: Sep. 2010 )	*	Days in Period
	=	4.875	/	11.746	*	365 / 4
	=	37.87

2. 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.

China Medicine's Inventory to Revenue for the quarter that ended in Sep. 2010 is calculated as

Inventory-to-Revenue	=	Average Total Inventories (Q: Sep. 2010 )	/	Revenue (Q: Sep. 2010 )
	=	4.875	/	17.55
	=	0.28

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.

China Medicine Inventory Turnover Related Terms

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China Medicine Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Distribution » China Medicine Corp (OTCPK:CHME) » Definitions » Inventory Turnover

Comparable Companies

Traded in Other Exchanges

N/A

Address

2nd Floor, Guangri Tower, No. 9 Siyounan Road 1st Street, Yuexiu District, Guangzhou, CHN

Website

http://www.chinamedicinecorp.com

China Medicine Corp is a distributor of pharmaceutical and medical products in the PRC, including prescription and over-the-counter drugs, chinese herbs, traditional Chinese medicines.

Executives

Daniel Shih	director	THE GATEWAY TOWER II, SUITE 3003, 25 CANTON ROAD, TSIMSHATSUI, KOWLOON K3 -
Sean Shao	director	21ST FLOOR, EVERBRIGHT BANK BUILDING, ZHUZILIN, FUTIAN DISTRICT, SHENZHEN, GUANGDONG F4 518040
Capital Markets Advisory Group Llc	10 percent owner	90 GROVE ST STE 204, RIDGEFIELD CT 06877
Mark J Allen	director, officer: President & Secretary	C/O INTERIORS INC, 91 FRENCH AVE, BRAINTREE MA 02184

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