Recent Articles

Explanation of Inventory Turnover

A relationship exists between inventory and sales. This is referred to as ‘Inventory Turnover’ or ‘Turnover Ratio’. It is simply the number of days it takes to turn over the dollar value of the inventory. This relationship is important because as the retailer, you would want this number has high as possible. You should not use this ratio to compare yourself to another similar store for various reasons, use it to compare yourself to the industry as a whole or to compare to past performances from the same store. It is a mere standard for internal comparison only; it is not a gauge of value. But if properly implemented and utilized, the retail store owner can maximize profits.

Flipping Houses – Proper Inventory Turnover Rate

02/27/2015

In your typical business operation, turning the inventory over as often as possible has several benefits.  First, it generally reduces overall costs, secondly, it generates greater profits and third, by increasing the profitability, the company has [...]

Inventory – How to Finance

04/16/2013

In financing a small business, there are a multitude of tools available.  One way to finance inventory is by using the 30 day pay program with your vendors.  Another tool is seasonal payment program and a third tool is exercising a line of credit [...]

Liquidity – What Does This Mean?

01/12/2013

In business, liquidity is defined as the period of time it takes to turn assets into cash.  It takes 20 minutes to turn the balance in the checking account into cash.  You head on down to the bank and present a check.  You get cash.  But most [...]

An Explanation of Inventory Turnover

01/03/2013

A relationship exists between inventory and sales.  This is referred to as ‘Inventory Turnover’ or ‘Turnover Ratio’.  It is simply the number of days it takes to turn over the dollar value of the inventory.  This relationship is important [...]