How can industrial company inflate value of inventory

Question

How can any industrial company inflate the value of its inventory so as to decrease net income and the taxes is has to pay in a year?

Answer 1

If a company raises the value of its inventory, the cost of the sales increases or/and the same thing occurs to general expenses, that makes the net income go up in place of going down. The valuation of the inventory of an industrial company depends on the value assign to the workforce and on the variety of general expenses.