Inventory is always regarded as an asset in any organization irrespective whether it is a profit making or non-profit making body. It is usually classified as one of the current assets although some people feel that it should be a liability. Proper management of the inventory is vital for any organization to stay profitable as it tends to ensure that the stock and also assets are properly managed (Bhalla, 2010). It also entails forecasting the market demand to avoid overstocking which will definitely reduce the shelf life of our stock. This will make my company stay profitable and also make my customers more satisfied as their needs are well catered for. Doing the forecasting on demand will also help the company to reduce its operational costs which will have a positive impact on its profits.In my paper I will look keenly on the return on assets to measure the profitability of my employer. I will also use all the inventory ratios on the assets to ascertain the trend of the firm on inventory and how it is affecting its profit making process. In will factor in the inventory to current assets ratio. I will also be interested in the inventory to total assets ratio. This should give me a ration and it is usually better for the figure to remain small as a smaller ratio shows inventory that is well managed. If the ratio is higher it shows that there is low demand and over procurement thus over supply which reduces the company’s profitability. A small ratio will mean that the customer demand is very high which will reflect higher profits and well managed inventory.