Friday, February 24, 2012

Inventory to Sales Ratios for Businesses

The graph below was created by using Google’s graph tools.

The line graph shows that US businesses have been steadily decreasing the amount of inventory they have on hand as a percentage of their sales. The graph shows that US businesses are recognizing the impact of the carrying costs of inventory on profits and are applying just in time (only as needed) concepts.

The chart shows that companies should be decreasing their inventory to sales ratios in order to be keeping up with peers.

The graph’s data was obtained from a Federal Reserve Bank of St. Louis’s website where economics data is provided on production and business activity in the United States. Data at this website can be obtained by clicking here.

Inventory to Sales Ratio - All US Businesses - 1992 to 2011


  1. in every companies,business needs to have an inventory system, A way to check how business performs, some is to monitor proper stocking.

    Inventory Control

  2. A good inventory system will also let you know which products are the most profitable, which ones are causing you to lose money, and which ones are selling the best.