Inventory
Also called: stock in trade, inventories
Goods a business holds to sell or to use in production, including raw materials, work in progress and finished goods.
Inventory is a current asset recorded at cost. Cash spent on it becomes an expense only when the goods are sold.
Inventory growing much faster than sales can mean goods are not selling, and may later need to be written down.
Example
Inventory of ₹42 crore against yearly cost of goods sold of ₹255.5 crore is about 60 days of stock.
Learn more in these lessons
- Working capital, inventory and receivablesWhat is working capital and why does it matter?
- Working capital efficiencyHow can working capital trends warn you about a company's health?
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