What is the difference between Inventory and Assets?

Fixed assets and inventory are the assets of a business, which act as important elements in financial statements and are also key resources in any resource. Assets can be defined as economic resources that are tangible or intangible form. Assets usually cover a large portion of financial position and also balance sheets.

There are two types of assets, namely, tangible assets and intangible assets. Inventory is part of the current assets that are held by a business to resell. Inventory is one of the crucial assets that determine how much revenue is generated for the organization and shareholder. There are mainly three types of inventories which are namely raw materials, work in progress, and finished goods. Inventory losses its value the longer it stays in business.

Inventory stands for the items that are sold to the customers so that it will be easier for the company to make a profit. Assets are something that would be needed to be obtained by the company so that they would continue to sell and maintain their business.

There are some companies that would choose which one they would like to focus on depending on the type of business that they have. Some would think that an inventory management system is more profitable while there are also others who believe that a fixed asset can be more substantial. Companies are recommended to know as many details as possible about their own company before they can make a decision.