How do I know if inventory on the books is actually still there?

The financial statements alone won't tell you — inventory value on a balance sheet is a number, not a physical confirmation, and it's one of the easier figures to overstate, whether through simple accounting drift over time or something more deliberate. Verifying it requires an actual physical count, ideally close to closing, compared against what the books say should be there, along with a look at how old the inventory actually is, since obsolete or unsellable stock can sit on the books at full value long after it's worth far less.

This is one of the reasons a purchase agreement commonly includes a closing-date inventory count as a condition, sometimes tied into the broader working-capital adjustment mechanism that compares an estimated closing statement to a final one after closing. If the actual count comes in materially short, that adjustment mechanism (or a specific inventory shortfall indemnity) is what protects you, rather than trying to renegotiate price informally after the fact.

Build a physical inventory count into your closing process rather than relying on the seller's own records. A Treadstone business lawyer can help structure the purchase agreement's price-adjustment mechanism around it.