Merchandise inventory is a long-term asset for any business. It encompasses the goods that are purchased by a company in order to produce and sell services or products. These items can range from raw materials and parts, supplies needed for daily business operations, to finished products ready for sale. This type of intangible asset allows a business to keep up with customer demand while staying profitable. Companies must manage and monitor their merchandise inventory to optimize their profit margins and ensure they have enough products to meet customer needs. Proper management of merchandise inventory is essential to maintain competitive pricing and yield higher profits.