All organisations need to understand the different facets of financial management. This section will discuss how finances relate to holding inventory.
There is a legal requirement in most countries for companies to submit their end of financial year accounts. For example, in the UK all Limited Companies must submit their annual accounts to Companies House at the end of the financial year.
These statutory annual accounts must include the organisation’s Balance Sheet and the Profit & Loss Account.
There are several types of financial account used in business, such as cash flow accounts and trading accounts. However, in this section we will only discuss the Balance sheet and the Profit and Loss account, as these are where the value of Inventory held is shown.
