Ang asked 9 months ago
May I know why the inventory is considered Fixed Assets when calculating the asset intensity? Aren't inventory a moving stock when it is sold? Thanks
2 Answers
Victor Chng Staff answered 9 months ago
Hi Ang,
Yes, inventory consists of moving stock, but it is always present. For example, in a product-based business, the company must consistently reinvest in inventory to generate revenue. Therefore, inventory can be considered a fixed asset in practice, as it is unlikely to ever reach zero.
Yes, inventory consists of moving stock, but it is always present. For example, in a product-based business, the company must consistently reinvest in inventory to generate revenue. Therefore, inventory can be considered a fixed asset in practice, as it is unlikely to ever reach zero.
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