Not every businesses is reliant on stocking inventory. For the businesses who actually do rely on inventory, they recognize it can represent one of the most significant assets within the business, apart from the human capital running the operation. Standard stocked inventory is often included in the purchase price of a selling enterprise. Such inventories are helpful in generating regular profits for the company and its shareholders. In some cases, inventories can represent a large asset, much like machinery, because it helps produce the cash flow necessary for the company’s survival. Because a business purchase would either mean a replenishment of under-stocked inventory or a purchase of previously-held inventory, the valuation of a business often hinges greatly on the amount of inventory on hand. There are a number of key factors important to how the inventory can effect the valuation and what to do about it in M&A deals. Here are some 30,000 foot insights.