Profit on the P&L. Cash on the shelves.
Accounting, controller and fractional CFO work for retail and inventory-heavy businesses, from a team that has closed these books before.
What we usually see when a retailer's inventory outgrows its cash
Sales are up and the bank balance is down because the growth is sitting in inventory. Open-to-buy is a gut call. Slow movers are not marked down until year-end, so gross margin looks better than it is for eleven months. Inventory in the accounting system does not match the counts. The line of credit is drawn to buy inventory the store cannot turn.
The numbers we watch
— Inventory turns and days on hand, by category
— Gross margin return on inventory investment
— Open-to-buy against the forecast
— Sell-through and aged inventory
— Shrink between counts and the ledger
— Vendor terms against the sales cycle
— Line usage against inventory build
— Sales and margin by location and channel
What we build
— Inventory reconciled to counts every month
— Margin by category, with markdowns taken when they happen
— An open-to-buy budget tied to the 13-week forecast
— A borrowing base the bank accepts, if the line requires one
— A scorecard by location
How the numbers connect
What the owner sees on Monday.
Everything to the right explains it.
Adds to cash
Sales
Units × realized margin, by category
Takes from cash
Inventory build
Purchases − cost of goods sold
Debt service and occupancy
Line interest, rent
The tree shows how cash is built for this industry: what adds to it, what takes from it, and the measures behind each. It is the structure of the scorecard we build.
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