80 BULLETIN 1317, U. S. DEPARTMENT OE AGRICULTURE, 
figure corresponds approximately to 1.05 per cent of annual pur- 
chases. On the basis of a weekly peak load of two and one-half 
times the minimum, the average peak load is 1.5 per cent of annual 
purchases and the average minimum is 0.6 per cent. Since the 
dealer must provide for the weekly peak load, which in the inter- 
vening period is represented by a larger cash or credit balance, this 
average peak load should perhaps be considered the average mer- 
chandise inventory for determining the rate of stock turn or for 
other purposes. 
The small amount of merchandise carried in stock in relation to 
the volume sold, necessitated by the perishable character of the 
commodity, is one of the striking characteristics of the meat trade. 
In comparison with an average inventory of 1.5 per cent of annual 
purchases in the retail meat trade, merchandise inventories are from 
9 to 12 per cent of annual purchases in the retail grocery trade, 
from 40 to 70 per cent in the retail shoe trade, and from 100 to 150 
per cent in the retail jewelry trade. 2 
CASH AND CREDIT ITEMS OF INVESTMENT 
In addition to store and delivery equipment and merchandise on 
hand, the dealer must have a balance of cash on hand and in bank 
for current operations; and, unless the business is conducted on a 
strictly cash basis, he will ordinarily have a credit balance, or excess 
of bills and accounts receivable over bills and accounts payable. 
Since delivery stores generally extend credit to their customers 
and carry stores do not, it is to be expected that this credit balance 
will be substantially larger among delivery stores. Accordingly, in 
the weighted average of the returns received, the total of such items 
was 2.69 per cent of annual net sales in the delivery group and 1.90 
per cent in the carry group. The difference of 0.79 per cent of an- 
nual sales, or its equivalent of 9.48 per cent of average monthly 
sales, is perhaps hardly a rough indication of the amount of capital 
of the dealer tied up in extending credit, since the comparison is 
between two entirely different sets of stores, and a further variation 
results from the greater or less freedom with which the one or the 
other class receives credit from wholesalers and slaughterers. 
In general, the total of these items is relatively substantially larger 
in the smaller than in the larger stores. The explanation un- 
doubtedly lies partly in the greater amount of credit extended by the 
small neighborhood store and partly in the somewhat less prompt 
collection of accounts by such stores than by larger concerns. There 
is also the factor that when business is done on a small scale the 
machinery provided must be larger in relation to the business done. 
This principle would apply to cash on hand and in bank as well as 
to equipment. 
TOTAL NET INVESTMENT 
The total net investment for the 60 carry stores with trade con- 
fined strictly to meat was 6.96 per cent of annual net sales and for 
the 88 delivery stores 8.09 per cent. (See Table 43.) At the allowed 
2 Estimates based upon data published in bulletins of the Bureau of Business Re- 
search of Harvard University. 
