Ann: Half Year Report to Shareholders, page-88

Of course you account for the inventory you run down, all I am saying is that running it down turns in back into cash, buying in inventory turns the cash back into honey, its fluid, they aren't losing anything when they run down stock, they could do it easily, but it wouldn't be smart.

What you seem to be overlooking is that there is a P&L impact when inventories are run down, per the basic accounting tenet of:

Cost of Goods = Opening Inventory plus Purchasess less Closing Inventory

Meaning that if Closing Inventory is Less than Opening Inventory (i.e. the running down of stock, as you describe it), then there's a cost knock to the P&L via higher Cost of Goods.

So, it's not just a cash flow benefit...


"But, I still feel Operating profit is more important than gross profit"

But Gross Profit is a key determinant of Operating Profit.

So that's a bit like saying dividends are more important than the dividend payout ratio, because the one directly informs the other.