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Wednesday, September 22, 2021
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Wholesale Inventories-to-Sales Ratio at 7 Year Lows

#inventory #money #demand #sales

Inventory turnover ratio, inventory-to-sales ratio, and sell-through rate are the 3 most useful inventory metrics for retail businesses“–Paul Ebeling

US wholesale inventory accumulation slowed in July, lagging behind sales, and it is now taking wholesalers the shortest time in 7 yrs to clear shelves.

Retail is a money machine where you turn capital into inventory, and inventory into sales. The more times this machine runs, the more profit are generated.

The inventory-to-sales ratio works in the opposite direction to the inventory turnover ratio, so a lower number is better.

Overall, businesses want to keep their inventory-to-sales ratio as low as possible. A low ratio results in higher profit margins and lower operational risks – if something goes wrong, the potential losses are much lower when you are carrying less inventory. But, a practical approach needs to be taken to allow for supply constraints and spikes in demand like now.

Have a prosperous weekend, Keep the Faith!

Paul Ebeling
Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.   

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