is this inventory something that the company has fully paid for?
will it include inventory from potentially several years ago that just hasn't sold?
what is an estimate of what the inventory is really worth?
is the $5.9 billion the costs they paid or the selling price they want?
thank in advance
The inventory is carried at cost on the books but is written down as it ages or there are liquidation sales in the stores, meaning the inventory is worth less than cost. For example last year $99.00 dollar retail coats were liquidated for $9.99. Lets say the costs cost $40.00 and were on the books at $40.00.Once they started selling them for $9.99 the value on the books would be reduced to $9.99. There is lots of inventory in the stores but too much of the same thing not selling and absence of items needed to sell to complete lines. It is estimated a Sears store is missing 40% of inventory needed to have complete selection in stock in the stores that competes with competition. Having too muck of a bad thing not selling and nothing of things people want and expect at the store is SHLD's current status.
Thanks....so that means we are in a big mess...it is doo-doo on our shoe?
Inventory is held on the books at cost, whatever they paid the manufacturer for it. Promotions and discounts are taken off of the revenue top line.