Merchandise in stock but not yet sold, unfinished products, and raw materials are all part of the Inventory of a business and are categorised as liquid assets because they can relatively easily be converted into cash. For a company, particularly in the manufacturing or import sector, Inventory is a key part of the overall asset base. Careful Inventory management is also an important challenge for a business, as over-stocking ties up capital, while having too little stock reduces sales and harms customer relationships.

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