Dragons Den Welly Wedge

[gazzae]

During this pitch there was an argument about why the profits in later years were going to be low. The girl who was pitching mentioned something about stock and Deborah said that stock wouldn't affect it as it is a profit and loss item. I have always thought that the stock lives on the balance sheet. So did I mishear what Deborah said, did I miss the point she was making or was she wrong?

[AndyCambs]

Profit should be the difference between cost price and sales price of the items sold.
So you should take into account opening stock, and closing stock.
So an increase in stock, shouldn't make difference to profit.
Personally I thought the girl was evasive with the answer.