ENINVENTORIES & WORKING CAPITAL · OCTOBER 17, 2026
Business Sales Outpace Inventory Growth as the Stock-to-Sales Ratio Falls
Census reported August business sales up 1.1% and inventories up 0.4%, lowering the seasonally adjusted inventories-to-sales ratio to 1.33 from 1.40 a year earlier.
What the October 15 report shows
Source publication date: October 15, 2026. The Census Bureau estimated combined manufacturing and trade sales at $2.1235 trillion in August, up 1.1% from July and 10.2% from August 2025. Inventories were estimated at $2.8188 trillion, up 0.4% for the month and 4.6% over the year. The estimates are adjusted for seasonal and trading-day differences but not for price changes.
- 01Sales rose 1.1% monthly
- 02Inventories rose 0.4%
- 03The ratio fell from 1.40 annually
The aggregate inventory-to-sales ratio declined
The seasonally adjusted total-business inventories-to-sales ratio was 1.33 at the end of August, down from 1.34 in July and 1.40 a year earlier. Sector ratios differed: manufacturers were at 1.48, retailers at 1.36, and merchant wholesalers at 1.18. An aggregate decline can reflect faster sales, restrained inventory, price changes, or different sector weights and does not prove that a particular company has the right inventory mix.
Inventory dollars are not the same as lender availability
A lender may exclude old, slow-moving, consigned, damaged, off-site, foreign, obsolete, customized, or otherwise ineligible goods from a borrowing base. Advance rates, reserves, appraisal values, concentration, field examination, reporting timing, liens, and control over proceeds can make loan availability materially lower than the accounting balance. Rising replacement cost can also increase working-capital needs even when physical units remain stable.
Practical borrower takeaway
Reconcile the general ledger to perpetual inventory, physical counts, locations, purchase orders, goods in transit, sales orders, margins, and receivable collections. Report aging, turns, markdowns, returns, shrinkage, obsolescence, and customer or supplier concentration. Forecast cash and borrowing-base availability under slower sales, delayed shipments, higher costs, and reduced advance rates. Use the Census ratio as context while supporting the loan with current company-level evidence.
Inventory-intensive borrowers should reconcile stock by age and location to current sales, margins, purchase commitments, and borrowing-base availability while testing slower turnover and higher replacement costs.
Discuss a financing need →This independent summary is based on the cited source and is provided for general educational purposes only. Terms and program requirements may change.