Working capital & assets

Inventory

Inventory should be valued based on ownership, usability, age, costing and the normal level required to operate, not simply the balance printed on the books.

Buyer lens

Separate healthy operating stock from obsolete, excess, damaged, consigned or slow-moving inventory.

Seller lens

Clean the inventory schedule and deal with aged stock before the buyer uses it as an easy valuation adjustment.

Why it matters

  • Book cost can materially exceed economic recovery.
  • Excess inventory can represent years of poor purchasing rather than value.
  • Open POs and supplier deposits can create additional cash obligations.

Evidence to reconcile

  • SKU inventory aging
  • Physical counts
  • Costing method
  • Open POs and deposits
  • Sales/movement by SKU