Wholesale Trade

What is a 'Wholesale Trade'

A wholesale trade is an economic indicator that measures the value in U.S. dollars of all merchant wholesalers' sales and inventories. Wholesale trade is one component of business sales and inventories. Only those firms which sell to governments, institutions and other businesses are considered part of wholesale trade.

BREAKING DOWN 'Wholesale Trade'

Wholesale-trade data gives investors a closer look at the consumer economy, as sales and inventory numbers can be a leading indicator of consumer trends. By looking at the ratio of sales to inventories, investors can see whether or not production may grow or slow in the future.

For example, if inventories are growing more slowly than sales, producers will have to make more product so that no shortages occur. Alternatively, if sales growth is slower than inventory growth, there will be an excess of supply, and production should slow in coming months. Because manufacturing is such a large part of GDP, the wholesale-trade data can be a valuable tool for keeping a finger on the pulse of the economy.

Equity markets are positively affected by an increase in production, as corporate profits increase. The bond markets, on the other hand, prefer moderate growth so as to stem inflation.

RELATED TERMS
  1. Business Inventories

    An economic figure that tracks the dollar amount of inventories ...
  2. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors ...
  3. Ending Inventory

    The value of goods available for sale at the end of the accounting ...
  4. Obsolete Inventory

    Term that refers to inventory that is at the end of its product ...
  5. Inventory Turnover

    Inventory Turnover is a ratio showing how many times a company's ...
  6. Highest In, First Out - HIFO

    In accounting, an inventory distribution method in which the ...
Related Articles
  1. Retirement

    Economic Indicators: Wholesale Trade Report

    By Ryan Barnes Release Date: On or around the 9th of the month Release Time: 10am Eastern Standard Time Coverage: Two ...
  2. Investing

    Days Sales of Inventory

    Days Sales of Inventory, also called Days Inventory Outstanding, is a key financial measurement of a company's performance pertaining to inventory management. In simple terms, it tells how many ...
  3. Economics

    Explaining Carrying Cost of Inventory

    The carrying cost of inventory is the cost a business pays for holding goods in stock.
  4. Fundamental Analysis

    Inventory Valuation For Investors: FIFO And LIFO

    We go over these methods of calculating this component of the balance sheet, and how the choice affects the bottom line.
  5. Fundamental Analysis

    Understanding Periodic Vs. Perpetual Inventory

    An overview of the two primary inventory accounting systems.
  6. Economics

    How Does a Perpetual Inventory System Work?

    Perpetual inventory is a system that continually tracks inventory items for quantity and availability.
  7. Personal Finance

    AR & Inventory Turnover Is Key For These Sectors

    Accounts receivable and inventory turnover are two important ratios in the current asset category. We will also discuss the key industries that benefit from a thorough understanding of these ...
  8. Stock Analysis

    Costco Wholesale First Quarter Earnings

    Costco Wholesale (Nasdaq:COST) announced its results for the most recent quarter on December 12, 2012. Costco Wholesale operates membership warehouses that offer a selection of nationally branded ...
  9. Active Trading

    Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.
  10. Options & Futures

    Financial Statements: Working Capital

    By David Harper (Contact David)A recurring theme in this series is the importance of investors shaping their analytical focus according to companies' business models. Especially when time is ...
RELATED FAQS
  1. What is the average annual dividend yield of companies in the wholesale sector?

    Find out more about the wholesale sector, what the dividend yield measures and the average annual dividend yield for companies ... Read Answer >>
  2. Why should investors care about the Days Sales of Inventory (DSI)?

    Learn about days sales of inventory and what it measures; understand why an investor would want to know a company's days ... Read Answer >>
  3. What metrics can be used to evaluate companies in the wholesale sector?

    Find out which metrics are used for the analysis and valuation of wholesale distributors, and learn what makes a metric appropriate ... Read Answer >>
  4. How do you analyze inventory on the balance sheet?

    Learn how to analyze inventory using financial statements and footnotes by doing ratio analysis and performing qualitative ... Read Answer >>
  5. What is the formula for calculating inventory turnover?

    Learn about the inventory turnover ratio, how it is calculated and what this efficiency metric tells businesses about their ... Read Answer >>
  6. How do I calculate the inventory turnover ratio?

    The inventory turnover ratio is a key measure for evaluating how efficient management is at managing company inventory and ... Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center