Inventory

Think: raw, uncooked materials to make the things companies...make. Inventory comprises “raw materials,” “work-in-progress,” and “finished goods,” which all can be considered (and counted as) inventory as goods are being produced from start to finish.

Well, it’s just stuff you have for sale...in one form or another. An auto dealer? All those cars she has sitting out there in the sun as dive-bombing targets for the birds? Yep, they’re inventory to the car dealership.

The loads of nose hair trimmers sitting on the shelves at The Well Appointed Nostril? Yep, they’re inventory, albeit gross-ish inventory, especially after use.

The 4,000 yards of denim cloth sitting in the weaving factory waiting for 13-year-old girls in Thailand to weave it all together to make Levi’s for The Gap? Yep, that cloth is inventory. It isn’t finished inventory. It’s not yet ready for prime time, but it’s an asset for the company who owns it, and is held as inventory, or work in process, on that side of the balance sheet.

And when it’s sold and turned into revenues, it’ll just become part of the expenses line on the income statement, usually as COGS, or cost of goods sold.

The 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 honker.