The amount of stuff a company has in its warehouse at the close of a financial period. So...the inventory it has once the reporting period ends. The ending inventory.
Your wheelchair wheel wax factory reaches the end of its quarter. You have 500 cases of finished wheelchair wax sitting on shelves in your warehouse. That figure represents your ending inventory: the amount sitting in there at the end of the fiscal quarter.
The value of that inventory would get listed on your balance sheet. If each case of wax sells for $100, then your ending inventory figure would equal $50,000 (500 times $100).
The ending inventory for one period (in this situation, the 500 cases of wheelchair wax) becomes the beginning inventory for the next fiscal period.
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Finance: What is inventory?2 Views
Finance allah shmoop What is inventory Well it's Just stuff
you have for sale in one form or another An
auto dealer Well all those cars she has sitting out
there in the sun is a dive bombing targets for
the birds Yeah while their inventory to the car dealership
the cars are inventory the loads of nose hair trimmers
sitting on the shelves at the well appointed nostril fine
store best nostril trimming store in the world Yet their
inventory albeit kind of gross ish inventory especially after use
the four thousand yards of denim cloth sitting in the
weaving factory waiting for thirteen year old girls in thailand
toe weave it all together to make levi's for the
gap Yep that cloth is inventory It isn't finished inventory
It's just a work in process not yet ready for
prime time or a prime thigh or whatever But it's
an asset for the company who owns it and it
is held as inventory on the balance sheet Work in
process right there at the balance sheet right there Okay
And when that inventory is sold and turned into revenues
it'll just become part of the expenses line on the
income statement usually has cost of goods sold or caw
Gse that's What people in the accounting bids say Cocks
thie 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 hunger And that hurts
Up Next
How is inventory managed for cash flow purposes? In order to avoid the cost of carrying slow moving or out of favor inventory that would take space...
Work-in-process inventory is just inventory... that is in the process of being built. In other words, it accounts for the inventory's asset value.