INVENTORY Definition

INVENTORY for companies: includes raw materials, items available for sale or in the process of being made ready for sale (work in process) for securities: it is securities bought and held by a broker or dealer for resale. A firm that has a sustainable competitive advantage has an inventory and net earnings are rising on a corresponding basis. Inventories that spike up/down are indicative of competitive industries prone to boom/bust.

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ABSOLUTE CHANGE is a numerical change in an empirical value, e.g. cost of goods was reduced by $9.00.

MANAGEMENT BUY-OUT is the purchase of a company by its management; usually with the backing of outside investors.

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