Answering Listener Questions: What Does My Inventory Turnover Mean? (And Why It Matters for Cash Flow)
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Answering Listener Questions: What Does My Inventory Turnover Mean? (And Why It Matters for Cash Flow)
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Narrated by:
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About this listen
Your inventory numbers are telling a story - but do you know how to read it?
In this episode, Sarah answers listener questions about inventory turnover ratio - the metric that reveals whether your products are converting to cash or quietly draining your resources.
She shows how to turn a confusing ratio like "2.75" into clear insights - that inventory turnover ratio means it takes your business 146 days to sell through the product on your shelves. The eye-opener: Sarah shares how a rapidly growing meat company with impressive revenue was hemorrhaging cash because they had eight months of chicken inventory collecting freezer rent.
Listen in to learn:
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Step-by-step calculations for both accrual and cash-based businesses
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Why industry benchmarks miss the point
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And how to interpret your number based on lead times, growth plans, and cash runway.
Essential listening for food entrepreneurs ready to make data-driven inventory decisions that protect cash flow.
BABOYOT Member Spotlight:
Amber Stevenson of Rosebud's Real Food
Learn more at www.rosebudsrealfood.com
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