INVENTORY & WORKING CAPITAL · SEPTEMBER 18, 2026
Business Inventories Rise Faster Than Monthly Sales
Census reported July business inventories up 0.8% to $2.765 trillion while combined sales and manufacturers’ shipments increased 0.3% to $2.121 trillion; the inventory-to-sales ratio held at 1.30.
What the September 16 release shows
Source publication date: September 16, 2026. The Census Bureau estimated manufacturers’ and trade inventories at $2.7647 trillion at the end of July, up 0.8% from June and 3.8% from July 2025. Combined distributive-trade sales and manufacturers’ shipments were $2.1207 trillion, up 0.3% for the month and 8.9% over the year. The data are adjusted for seasonal and trading-day differences but not for price changes.
- 01Inventories rose 0.8%
- 02Sales rose 0.3%
- 03Inventory-to-sales ratio 1.30
The aggregate ratio held below its year-earlier level
The total business inventories-to-sales ratio was 1.30 in July, unchanged from June and below 1.37 in July 2025. Sector paths differed: manufacturer inventories rose 0.4%, retailer inventories increased 0.8%, and merchant-wholesaler inventories rose 1.3% during the month. A national ratio does not establish whether one company has the right products, salable condition, profitable pricing, or dependable customer demand.
Inventory can support growth while consuming cash
Purchasing stock before collection can lengthen the cash-conversion cycle even when reported sales grow. Slow-moving, obsolete, seasonal, consigned, foreign, work-in-process, or customer-specific goods may receive limited or no borrowing-base value. Lenders may also test supplier concentration, purchase commitments, inventory location, insurance, liens, shrinkage, gross-margin volatility, and the time required to convert stock into collected receivables.
Practical borrower takeaway
Prepare inventory aging by item or category, document turns and gross margin, reconcile the subledger to the balance sheet, and explain purchases that outpaced sales. Connect receivable days, payable terms, seasonality, and planned orders to a weekly or monthly liquidity forecast. If requesting a revolving line, model eligible inventory and receivables under the lender’s advance rates, exclusions, reserves, reporting cadence, and field-examination requirements rather than sizing the facility from total inventory alone.
Inventory-dependent borrowers should separate productive stock from slow-moving goods, reconcile purchasing to sales velocity, and size working capital around the actual cash-conversion cycle and borrowing-base eligibility.
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