Distinguish between stock and inventory

Inventory:

Inventory includes a small business’s finished products, as well as the raw materials used to make the products, the machinery used to produce the products and the building in which the products are made. In other words, anything that goes into producing the items sold by your business is part of its inventory.

Stock:

Stock is the finished product that is sold by the business. In some cases, stock is also raw materials, if the business also sells those products to its customers. For example, a car dealership’s stock includes cars, but also can include tires, engine parts or other car accessories.

Differences Between Inventory and Stock:

While stock deals with products that are sold as part of the business’s daily operation, inventory includes sale products and the goods and materials used to produce them. For example, the cars, car parts and accessories are sold during normal business practices, but the machines that run diagnostic tests on cars or the car lot itself are not. Inventory takes in account all of the assets a business uses to produce the goods it sells and determines the sale price for the stock. The stock determines the amount of revenue a business generates. The more stock that is sold, the higher the revenues.