E-commerce · Economics
Dead and slow-moving inventory
Published · Reviewed by The Diligence Standard Team · Updated
Book cost does not equal recoverable value when units are aged, seasonal, restricted or declining.
Records to reconcile
- SKU age buckets
- Trailing sell-through
- Markdown, disposal and return rights
Warning signal
A large share of inventory has no recent demand or depends on uneconomic advertising.
Transaction impact
Closing inventory and borrowing availability may be overstated.
Response
Apply SKU-specific recoverability and exclude unsupported units from full-value consideration.