Inventory holds a substantial part of funds engaged as working capital of any manufacturing organization. As a major component of total current assets, inventory gains importance due to the fact that it is a non-cash item and it takes considerable amount of time to get converted into finished goods and ultimately into cash. This duration of conversion of cash into inventory and in turn into finished goods to cash is considerably long, as a component of total operating cycle. It is also noticeable that inventory also needs to be taken care from the viewpoint of the fact that it is carried physically, unlike cash and receivables which may also be carried digitally or virtually. Inventory may also get destroyed by fire, theft, pilferage, aging, and loss by any other reason etc. Inventory is the basic component of any final product. Thus, it also consumes major portion of the cost incurred during the transformation process. Importance of efficient management of inventory gains significance due to all these reasons. Dabur India Limited is the best Ayurvedic and Natural Health Care Company. Looking at its wide range of inventory items with differentiable life spans,it would be interesting to analyze the inventory management of Dabur India Limited.
Inventory, inventory management, current assets