CDF Learning Series
Lessons for Building a Better Retail Business
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Cashflow shows the amount and speed of funds flowing into and out of your business. Understanding and managing cashflow can help improve your return on investment if it is managed properly. While many business owners look at sales or gross margin to measure the health of their business, cashflow management can be an even more valuable tool for profitable growth and success.
There is no greater asset on your balance sheet that impacts you more than inventory. That’s why it is so important to measure it in terms of turnover, age, number of days supply, and productivity. Learn the importance of measuring inventory productivity through a measurement tool called Gross Margin Return On Inventory Investments (GMROII).
Gross Margin Return On Inventory Investments – GMROII and Modified GMROII, helps to illustrate how repayment terms can also impact inventory productivity. We’ll cover both in more detail here, show you a couple of examples, and illustrate the power of this metric as a management tool.
Cashflow is the most important factor in maintaining a healthy and sustainable business. Gross Margins are also important, but not when the margins come at the expense of positive cashflow. Learn practical tips to help you avoid negative cashflow situations.
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