Question

Not all companies have inventory listed among their assets. When they do not have physical inventory, should they still think about inventory? What do you mean?

We focus in Finance on rewards for the shareholders. That is how we structure all our assessments. Many people focus on dividends as a measure of shareholder reward. Is that valid? Are there better assessments? Are dividends a good idea?

Answer 1

1.inventory should always be managed properly in order to have a competitive edge, because it will be reduce the overall wastage of the inventory of the company and it will help in better production and delivery management so even though the company is not having a physical inventory, it needs to be highly updated with the demand and supply of inventory in order to prevent any kind of gap between demand and supply so there need to be a proper management of whether it is a physical inventory or non physical inventory.

2. Dividend is a part of profits of the company which are to be returned to the shareholders so if the share holders are highly inclined towards receipt of dividend, it is their own money so they can take it back from the company and if the managements want to return to them and if the management feels that it does not have any better opportunity in reinvestment of those profits back into the business to earn high rate of return, it should be returning the profits back to the shareholders because share holders will be helping them self in generating a higher rate of return to uniform payment of dividend so I think overall dividend is a good idea which helps the shareholders in generating long-term uniform payments at regular intervals.