Glossary · Reading the business
In short
The method used to assign a monetary value to a business's inventory. This directly impacts the balance sheet and the cost of goods sold, affecting the business's profitability and overall value.
Understand how the seller values inventory (e.g., FIFO, LIFO, weighted average). During due diligence, reconcile physical inventory counts with financial records. Ensure the inventory isn't obsolete or unsellable, as overvalued inventory inflates assets and profits, potentially leading you to overpay.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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