Inventory refers to the assortment of raw materials, work-in-progress items, and finished goods that a company holds in its possession. It serves as a vital asset for a company, as the turnover of inventory plays a crucial role in generating revenue and earnings for shareholders. There are three primary types of inventory: raw materials, representing the materials used in production; work-in-progress, denoting partially completed products; and finished goods, representing the completed products available for sale. As a current asset, inventory is recorded on a company’s balance sheet and is crucial for maintaining an efficient supply chain and maximizing sales and profitability.