ABC Analysis Inventory is a method of categorizing inventory items based on their relative importance. It divides goods into three categories—A, B, and C—depending on the value they represent to a business. Items in category A are the most important and make up a small portion of total inventory count; these should be monitored closely and reordered frequently. Those in the category B group are moderately important items and account for a larger share of the total count; they can be checked less often while still ensuring sufficient numbers are on hand. Finally, those items in category C represent the least importance and make up the largest portion of the overall inventory; these can generally remain untouched until stock needs replenishment. ABC Analysis helps businesses assess inventory on an even basis to ensure maximum profits are achieved.