Financial Accounting Blog

Friday, December 12, 2003

CNN reports that in the month of October inventories increased more than expected, but inventories did not increase at the same level as sales. This has caused the stock-to-sales ratio to be at record low.
Inventories at U.S. businesses climbed more than expected in October but failed to keep pace with sales, a government report showed Thursday, suggesting a need to restock shelves is helping fuel a rise in production.

Inventories at the nation's manufacturers, retailers and wholesalers rose 0.4 percent in October to a seasonally adjusted $1.18 trillion, the Commerce Department said. Economists polled by Reuters had expected only a 0.2 percent gain.

The department said business sales rose 0.7 percent, outstripping the inventory increase and pushing the stock-to-sales ratio, a measure of how long it would take to deplete stocks at the current sales pace, down to a record low 1.35 months.