Inventory

Definition

A company's products that are either completed or in some stage of completion and that will be sold to the company's customers.

See Also

Cost of goods sold, gross profit, gross profit margin, Profit & Loss Statement, variable expense.

Tips

This includes all consumable inventory, raw materials and supplies. This does not include the fixed hard assets in the business. Inventory is often not included in the purchase price of a business for smaller transactions. Knowing what to include in the inventory calculation is therefore vital properly calculating the purchase price.