inventory (redirected from Inventory management)

Inventory

For companies: Raw materials, items available for sale or in the process of being made ready for sale. They can be individually valued by several different means, including cost or current market value, and collectively by FIFO (First in, first out), LIFO (Last in, first out) or other techniques. The lower value of alternatives is usually used to preclude overstating earnings and assets. For securities firms: Securities bought and held by a broker or dealer for resale.

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inventory

The amount of raw materials, work in process, and finished goods being held for sale at a given time. Diamonds held by a jeweler, engines owned by General Motors, and canned and frozen foods in a grocery store chain's warehouse are examples of inventory. Inventory is generally the least liquid item listed by a firm in the current asset account of its balance sheet. See also beginning inventory, ending inventory.

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inventory

(1) The total listings controlled by a real estate broker.(2) The total property for sale or lease in a defined area.(3) Property held for sale in the ordinary course of business or to be used in the manufacture of goods held for sale.(4) An itemized listing of personal property.

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Inventory

What Does Inventory Mean?

The raw materials, work-in-process goods, or completely finished goods that are currently or soon will be available for sale. Inventory represents one of the most important assets most businesses possess; inventory turnover is one of the primary sources of revenue generation and subsequent earnings for the company's shareholders.

Investopedia explains Inventory

Possessing a high amount of inventory for long periods is not usually good for a business because it carries inventory storage, obsolescence, and spoilage costs. However, possessing too little inventory is not good either, because the business runs the risk of not filling customers' orders and losing potential sales and thus market share as well. Inventory management techniques such as a just-in-time inventory system can help minimize inventory costs because goods are created or received as inventory only when needed.

Related Terms:
• Accounts Payable—AP
• Cash Conversion Cycle—CCC
• Inventory Turnover
• Accounts Receivable—AR
• First In, First Out—FIFO

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Inventory

For income tax purposes, inventory consists of items acquired for sale to customers in the regular course of a taxpayer's trade or business.