Up Your Cash Flow / Goldstein 88-91

90  I like to refer to inventory as the "fantasy asset." More games are played and guesses are made on the value shown as inventory on financial statement than any other item in the statement. This occurs so often that many times management loses sight of the importance of proper control and evaluation of inventory--the single most important asset in determining company profitability.

 

If you use an incorrect inventory for your financial statement your profit or loss statement will be incorrect by the same amount on a dollar-for-dollar ration.