InvestorQ : what is meant by Inventory cost in refinary companies? and how decreasing prices of crude affects the share price of refinary companies? Where on company's balance sheet affect the decrease in crude prices globally?
Prathmesh Undre made post

what is meant by Inventory cost in refinary companies? and how decreasing prices of crude affects the share price of refinary companies? Where on company's balance sheet affect the decrease in crude prices globally?

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sarah Leo answered.
5 months ago
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The inventory is both the forms of crude for converting to finished oil and finished oil before sale. The reason this is important is that the inventory is valued based on the prevailing price of crude and when crude prices are down, then refinery stocks have to take a write-down. For example, RIL has taken a hit of nearly Rs.4250 crore in the March quarter purely on account of inventory valuation losses.

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