What is Inventory? Definition or Meaning

Think of the contents of your home. It might have furniture that’s fully assembled, food that’s both raw and cooked and a range of other items in various stages of completion such as the garden and laundry. A business’s inventory is a similar concept. It includes goods the company owns both raw materials and complete.

For example…

Say Tim, a car mechanic workshop took us to show his workshop name. For his business, this is his physical inventory where he keeps his brand new spare parts, half-finished engine components and raw materials like glass or plastics.