The stock turns four times a year. The catalogue has 1,400 lines.

A blended stock turn is an average of two very different businesses, and the one quietly consuming the cash is rarely the one being measured.

By Steve 5 min read
Abstract bridge artwork for The stock turns four times a year. The catalogue has 1,400 lines.

Four turns a year is a respectable number in a lot of distribution and light manufacturing businesses. It is also, in almost every case, an average of two businesses that have nothing to do with each other. One of them turns its stock ten or twelve times and pays for the building. The other turns half a time a year, occupies most of the racking, and has been quietly absorbing cash since before anyone currently in the warehouse was hired. The blended figure hides this because inventory value and inventory…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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