Business Inventories

Finance allah shmoop What is inventory Well it's Just stuff

you have for sale in one form or another An

auto dealer Well all those cars she has sitting out

there in the sun is a dive bombing targets for

the birds Yeah while their inventory to the car dealership

the cars are inventory the loads of nose hair trimmers

sitting on the shelves at the well appointed nostril fine

store best nostril trimming store in the world Yet their

inventory albeit kind of gross ish inventory especially after use

the four thousand yards of denim cloth sitting in the

weaving factory waiting for thirteen year old girls in thailand

toe weave it all together to make levi's for the

gap Yep that cloth is inventory It isn't finished inventory

It's just a work in process not yet ready for

prime time or a prime thigh or whatever But it's

an asset for the company who owns it and it

is held as inventory on the balance sheet Work in

process right there at the balance sheet right there Okay

And when that inventory is sold and turned into revenues

it'll just become part of the expenses line on the

income statement usually has cost of goods sold or caw

Gse that's What people in the accounting bids say Cocks

thie Inventory is a good but inventory is always good

Of course as many a customer has learned after taking

a hefty shock straight to the hunger And that hurts