The Independent Investor

You may have seen the section in a 10-k report, sometimes hidden way in the back, called “Summary of Significant Accounting Policies –Inventory Valuations”, and wondered what real effect it has on your investment. If the company you are following provides services, then this will have little bearing on net income; however, if the company is heavily reliant on producing or selling physical goods, then inventory methods can have a material (significant) impact on earnings. Read more…