What is the difference betwn "Inventory" and "Stock".
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Answer Posted / chandu_c4u
The raw materials, work-in-process goods and completely
finished goods that are considered to be the portion of a
business's assets that are ready or will be ready for sale.
Inventory represents one of the most important assets that
most businesses possess, because the turnover of inventory
represents one of the primary sources of revenue generation
and subsequent earnings for the company's
shareholders/owners.
Possessing a high amount of inventory for long periods of
time is not usually good for a business because of
inventory storage, obsolescence and spoilage costs.
However, possessing too little inventory isn't good either,
because the business runs the risk of losing out on
potential sales and potential market share as well.
Inventory management forecasts and strategies, such as a
just-in-time inventory system, can help minimize inventory
costs because goods are created or received as inventory
only when needed.
Stock: type of security that signifies ownership in a
corporation and represents a claim on part of the
corporation's assets and earnings.
There are two main types of stock: common and preferred.
Common stock usually entitles the owner to vote at
shareholders' meetings and to receive dividends. Preferred
stock generally does not have voting rights, but has a
higher claim on assets and earnings than the common shares.
For example, owners of preferred stock receive dividends
before common shareholders and have priority in the event
that a company goes bankrupt and is liquidated.
Also known as "shares" or "equity".
A holder of stock (a shareholder) has a claim to a part of
the corporation's assets and earnings. In other words, a
shareholder is an owner of a company. Ownership is
determined by the number of shares a person owns relative
to the number of outstanding shares. For example, if a
company has 1,000 shares of stock outstanding and one
person owns 100 shares, that person would own and have
claim to 10% of the company's assets.
Stocks are the foundation of nearly every portfolio.
Historically, they have outperformed most other investments
over the long run.
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