Inventory in balance sheet refers to the products your business owns that are intended for sale. It could be a physical item such as raw materials, finished goods or merchandise sitting in your warehouse; or inventory could include intangible items such as intellectual property. No matter what form it takes, inventory is one of the most important assets of your business and must be managed carefully. Without accurate inventory levels and records, businesses can easily become overstocked or run out of essential items. An inventory balance sheet helps you keep track of all inventory-related details and make sure you have the right amount of stock on hand at all times.