All those types of goods and materials that are used by any business to sell in the market for profit are called Inventory. But whatever asset is used for that profit is not called inventory. Let us consider one example to elaborate on this. If any item is produced in a production plant with the help of a machine then the final product or good will be considered as inventory and the machine which was used for that is an asset, not the inventory.

Inventory in the construction industry is not only the manufactured product, the product that is suitable for sale, but also all the raw materials used in the preparation of each form of concrete, which is also a form of inventory. For example, after preparing sugar, jiggery, these will also be called inventories, and to make them, sugarcane, etc. will go into inventory as raw material.