You know your goods. You know your accounts. You know, within a few thousand dollars, what is in the safe right now. What almost no independent dealer can see — because the accounting file was built to satisfy a tax return, not to answer a management question — is which dollar of inventory deserves the next dollar of capital.
The business below is a composite, benchmarked to published trade survey data. Every figure is calculated from the stated inputs, benchmarked to a named source, or labelled as an assumption. The three are never blended, and where the arithmetic is not obvious it is printed beside the number.
Aster & Vale, Inc.
Manhattan · 24 years
Storefront retail plus wholesale to roughly forty independent accounts.
Revenue $6.40M
Retail $3.90M · Wholesale $2.50M
Gross profit $2.469M · 38.6%
Operating profit $371K · 5.8%
Inventory at cost $2.550M
Turning 1.54× a year
Inventory plus wholesale receivables, less trade payables. Forty-two percent of revenue.
Goods sit 237 days, wholesale pays at 75, vendors are paid at 33.
Against $371,000 reported. The difference is rent on the money.
Against 0.97 for the house. The best capital decision in the building.
Carried $2.550M against $2.058M at a 1.20 GMROI goal.
Of $487,000 on memo. No recall policy, and the log has never been aged.
| Where this house sits against the trade | This business | Independent average | Read |
|---|---|---|---|
| Retail gross margin | 46.0% | mid-to-high 40s | In line |
| Inventory turns, blended | 1.54× | 1.0 – 1.5× | Slightly ahead |
| GMROI as reported | 0.97 | 0.70 – 1.00 | Average |
| GMROI with freight in landed cost | 0.92 | 0.70 – 1.00 | Below the top of the range |
| Operating margin | 5.8% | low-to-mid single digits | At the upper end |
| Wholesale gross margin, carried honestly | 23.9% | priced at 27.0% | Below the band it was priced into |
On every published benchmark this business is normal. Margin is held without discounting, turn is slightly ahead of the trade, operating profit sits at the upper end of what surveys report for independents. Being normal is the finding. A dollar of inventory here generates 97 cents of gross profit, must cover 82 cents of operating expense, and costs about 9 cents to hold — leaving six. Read across the whole $2.71 million committed to goods and money owed, the business earns 13.7 percent and pays roughly nine, so $127,000 of the $371,000 operating profit is genuinely the owner's and the rest is the cost of the capital. Nothing overleaf is a merchandising failure. All of it is capital committed without a report that said what it would earn.
A business does not fail in this trade by running out of customers. It fails slowly, by converting liquid money into goods that will not move, until there is no room left to buy the piece that would have made the year.
| Finding | Where it stands | The decision it asks for | Cash effect |
|---|---|---|---|
| Wholesale terms | Accounts pay at 75 days against net-thirty. Vendors fund $165,000 of it; the owner funds $349,000 permanently. The book was priced as though the money arrived on delivery. | Six largest accounts to 60 days, terms review at 75. Or reprice the book at the margin it actually earns — 23.9 points, not 27. | +$103,000 released |
| Memo control | $487,000 on memo — 19% of inventory, out of the safe and earning nothing. $134,000 of it past 120 days, with no recall policy and a log that has never been aged. | Ninety-day recall written into the terms; log aged weekly. On the recovery profile, $80,000 returns re-merchandisable and $46,000 converts to an invoice. | +$80,000 goods redeployed |
| Aged goods | $355,000 unsold at 18 months, carried at full cost with no reserve. One blended write-down assumption is applied across all of it. | Split the list. Metal-led goods carry an unrecognised gain after two years of metal appreciation and refine close to book; stone-led goods are carried against a market that has fallen and cost more every month held. Same shelf, opposite instructions. | $134,000 exposure quantified |
| Inventory level | Open-to-buy has never been calculated. At a 1.20 GMROI goal the published sizing method warrants $2,058,000; the cases hold $2,550,000. | Set the goal, then buy against it by category. At a 0.97 goal the same formula justifies exactly what is already there — which is the decision nobody made on purpose. | $493,000 to redeploy |
| Vendor terms | Twenty-two percent of purchases paid on delivery, landing hardest in the weeks the floor is built for the holiday. | Two largest cash-on-delivery vendors to thirty days. After nineteen years of clean payment history that is a conversation, not a negotiation. | +$49,000 permanent |
| Landed cost | Roughly $115,000 of inbound freight and transit insurance booked to overhead instead of to the goods — 1.8 points of revenue. | Reclassify, then reprice. It does not change operating profit by a dollar, which is exactly why it is dangerous: every pricing and buying decision has been made against a margin 1.8 points better than the real one. | +$28,000 on repricing |
| Metal exposure | $1.2M of annual metal content bought at spot on the invoice date, with no timing rule and no repricing rhythm for goods already in the case. | Fix on order for the holiday build; reprice metal-led goods quarterly. Gold ran roughly a quarter in 2024 and half again in 2025 — two years that moved further than the larger scenario. | $120–300K cost sensitivity |
| Closing cash on the plan as it stands | Sep | Oct | Nov |
|---|---|---|---|
| Plan as it stands | 143,000 | 72,000 | 251,000 |
| Two COD vendors to 30-day terms | +47,000 | ||
| Six largest accounts to 60 days, first tranche | +45,000 | ||
| Recalled memo displacing the October buy | +22,000 | ||
| October, acted on now | 186,000 | ||
October is structural, not seasonal. Wholesale accounts buy ahead for the holiday and pay seventy-five days later, so their orders ship in October and their money arrives in December. The floor still has to be paid for in between. Acting now closes the month near $186,000 instead of $72,000 — nothing discounted, nothing borrowed, no additional revenue assumed.
The summer show costs $46,000 all in. On twenty-seven points and free money it breaks even at $210,000 written. On the margin the book actually earns, after funding the goods for a hundred and five days before collection, it breaks even at $244,000.
Prior shows averaged $287,000 written. That is a gain of $8,100, or 1.18× on the cash committed — positive, thin, and thirty-four thousand dollars nearer the line than the business believed. The instruction that changes the outcome is to pre-book the $244,000 before the doors open, which converts the show from a gamble into a delivery.
This report keeps cash recovered, outflow avoided, working capital released, receivables created and economic value recovered in separate columns, and never totals across them. Only the first two change an October bank balance.
A first Vault Report on your business — built from QuickBooks or your existing ledger, the memo log, vendor statements, customer aging and a point-of-sale export. No new software and no migration. In your hands in twenty-one days, with the arithmetic shown on every figure. Engagements are monthly and fixed, scoped to the size of the house; scope is set after the first report, once what the file needs is known rather than guessed at. Nothing owed if the first report is not worth an hour of your time.
Aster & Vale, Inc. is a composite illustration constructed from financial patterns typical of independent jewelry and watch dealers and benchmarked to published trade survey data. It is not a client and does not represent any actual business. All figures are illustrative and are not a projection, guarantee, or assurance of outcome for any particular business. Cost of capital, recovery, fallout, order volume and price-movement rates are stated assumptions. Benchmark ranges are drawn from the Jewelers of America Cost of Doing Business Report, prepared by Profit Planning Group, the Jewelers of America / Jewelers Board of Trade Retail Jewelers Benchmarking Study, published GMROI and inventory-sizing analysis, public spot data and the Rapaport price index; TaxBooksCFO claims no affiliation with any of them. TaxBooksCFO LLC · New Jersey · serving clients in all fifty states.