Is inventory a fixed asset?

Open in App

Solution

An inventory is not a fixed asset, as inventories will be consumed by the business within a year to generate profits.

Also see:

Difference Between Assets and Liabilities

What Are Current Assets?

What Are Non Current Assets?

Suggest Corrections

Similar questions

Q. Current Ratio 4; Liquid Ratio 2.5; Inventory ₹ 6,00,000. Calculate Current Liabilities, Current Assets and Liquid Assets.

From the following information calculate:

(i) Gross Profit Ratio (ii) Inventory Turnover Ratio (iii) Current Ratio (iv) Liquid Ratio (v) Net Profit Ratio (vi) Working capital Ratio:

	Rs
Revenue from Operations	25,20,000
Net Profit	3,60,000
Cast of Revenue from Operations	19,20,000
Long-term Debts	9,00,000
Trade Payables	2,00,000
Average Inventory	8,00,000
Current Assets	7,60,000
Fixed Assets	14,40,000
Current Liabilities	6,00,000
Net Profit before Interest and Tax	8,00,000

Q. Current Assets of a company is are ₹ 5,00,000. Its Current Ratio is 2.5 : 1 and Quick Ratio is 1 : 1. Calculate value of Current Liabilities, Liquid Assets and Inventory.

Current liabilities of a company are Rs 75,000. If current ratio is 4:1 and liquid ratio is 1:1, calculate value of current assets, liquid assets and inventory.

Q. Calculate the following ratio on the basis of following information:
(i) Gross Profit Ratio (ii) Current Ratio (iii) Acid Test Ratio (iv) Inventory Turnover Ratio (v) Fixed Assets Turnover Ratio

	Rs.
Gross Profit	50,000
Revenue from Operations	1,00,000
Inventory	15,000
Trade Receivables	27,500
Cash and Cash Equivalents	17,500
Current Liabilities	40,000
Land & Building	50,000
Plant & Machinery	30,000
Furniture	20,000

Join BYJU'S Learning Program

Is inventory a fixed asset?

An inventory is not a fixed asset, as inventories will be consumed by the business within a year to generate profits. Also see: Difference Between Assets and Liabilities What Are Current Assets? What Are Non Current Assets?

An inventory is not a fixed asset, as inventories will be consumed by the business within a year to generate profits.

Also see:

Difference Between Assets and Liabilities

What Are Current Assets?

What Are Non Current Assets?