幫幫手!有無model answer

try to help you.....

In case, the fail is refer to the inventory (dead stock). In accoutning concept, inventory can in turn of sales/revenue when it is sold. However, when it is kept in stock, that means a cost is occured. When a cost occurs it will reduce our revenue and decrease our asset in the balance sheet.

Even we are not talking about the cost on papaer, we have physically pay a amount to exchange the inventory (that create a liability if it is on credit), and our moeny will reduce. Therefore, if we keep too much stock. It will result in in-balance between sales and inventory. The trunover of sales cannot cover the quantity of kept of stock. When financial crisis happend, the company will have no enough cash flow to maintain the business.