A Truck Full of Melons -- Dickeson

That's a 17 percent return on sales and a 25 percent return on my cash. I repeat the trip. Now I have $500 and a 50 percent return on cash. Suppose I do that 20 times and wind up with $5,000. I've earned 500 percent on my original thousand.

What's illustrated by this crude example is the value of inventory turnover. The more times we turn inventory over, the more cash we take to the bank. The faster we turn over our cash, our liquid resource, the greater the profit. Does it really work that way?