Inventory is the stuff that a company has or makes to sell to its customers. It can be raw materials such as wood, metal, or plastic, that are used to make something else. It can also be finished products like toys or clothes, that are ready to be sold. It can also be the company's goods stored in a warehouse. Inventory is an Asset for a company, because it represents money that will be made from selling stuff. A company with a Durable Competitive Advantage has Inventory that rises with Net Income. That would mean the company is increasing sales and growing its business.
Equations
Check if Inventory and Net Income are on a historical corresponding rise:
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