What if a company has a high level of inventory
Inventory is an asset before it is used and does not have a directimpact to income. What if a company has a high level of inventorydue to decreasing demand, could that have an impact to income?
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Consider a spring that does not obey Hooke's law very faithfully. One end of the spring is fixed. To keep the spring stretched or compressed an amount x, a force along the x-axis with xcomponent Fx =kx - bx2 + cx3 must be applied to the free end, w
Increasing or decreasing inventory does have an affect on incomebecause it used to calculate either cost of good manufactured (rawmaterials) which goes into calculating costs of good sold(inventory).
Inventory is an asset before it is used and does not have a directimpact to income. What if a company has a high level of inventory due to decreasing demand, could that have an impact to income?
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