Business Inventories

DEFINITION of 'Business Inventories'

An economic figure that tracks the dollar amount of inventories held by retailers, wholesalers and manufacturers across the nation. Business inventories are essentially the amount of all products available to sell to other businesses and/or the end consumer. When tracked alongside a sales index, production activity in the near term can be predicted.

BREAKING DOWN 'Business Inventories'

By tracking business inventories along side sales, investors can interpret the direction of production demand going forward. If, for example, inventory growth is less than sales growth, production demand will increase, thus creating economic growth. The opposite could happen should inventory accumulation occur, which would cause national production to slow.

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RELATED FAQS
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    Learn about days sales of inventory and what it measures; understand why an investor would want to know a company's days ... Read Answer >>
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    For a couple of key reasons, average inventory can be a better and more accurate measure when calculating the inventory turnover ... Read Answer >>
  3. How do I calculate the inventory turnover ratio?

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  4. What does inventory turnover tell an investor about a company?

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  5. What are the generally accepted accounting principles for inventory reserves?

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