Inventory Inventory is scary for us investors because it is a relatively easy way to overstate the net income. You can grow all you want. Whether there is an ability to sell it before it perishes or degrades in quality is another story. So if you grow too much, you could potentially be overstating your results in the short term. You can then write the excess off in a later period or take an inventory impairment if you can salvage some or use it for a less valuable product.
im not saying that this is happening purposefully, but we have seen some inventory write downs in the industry.