Most investors think about property, plant, and equipment. But how often do we think about inventory? Probably not enough. But inventory is such an important aspect of a business.

Inventory ties up capital upfront and—depending on its shelf life—puts the business at risk of losing that money forever.

Take retail clothing: clothing expires with every season, and seasons have become every week with fast fashion. Retailers initiate fire sales if clothing doesn't sell in season in attempt to make back the money it spent.

And as the business grows, more and more capital is tied up in inventory.

In contrast:

Jewelry doesn't expire.

Carpet doesn't expire.

Furniture doesn't expire.

And so these businesses can hold inventory longer to sell the product at a fair profit.

Even better, some businesses, like Sirius XM, don't require inventory at all; therefore, no capital is ever tied up in inventory. Pair this with infrequent need to replace its satellites or obtain FCC licenses, and Sirius XM is free to return lots of cash to shareholders.

That's a dream come true.

As a shareholder, know the inventory—both its make up and its shelf life—that your money is tied up in. Because if you're not careful, a good portion of your investment could go up in smoke in the next fire sale.