Definition for : Inventories

Inventories represent the temporary Assets created as part of the Business cycle. Businesses may Transfer to inventories Purchases made in the current period for consumption in Future operating cycles. Inventories are shown on the Balance sheet. There are inventories of Raw materials, goods for resale, products and work in progress, finished products. See also Days' inventory ratio.

(See Chapters Chapter 3 Earnings, Chapter 4 Capital employed and invested capital, Chapter 5 Walking through from earnings to cash flow and Chapter 7 How to cope with the most complex points in financial accounts of the Vernimmen)

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