The impacts of cost inversion are:

1. In financial statements, cost inversion is manifested as negative gross profit margin, which sends a negative signal to investors;

2. In the audit, cost inversion means that the company's inventory is likely to be at risk of price decline, and it is necessary to consider whether to make provision for inventory price decline, because the selling price is already significantly lower than the cost.

Companies experiencing cost inversion must make changes in their business, otherwise they will suffer greater losses as they sell more.

Cost inversion refers to the phenomenon that the market price of a product is lower than the cost price, while cost inversion is just the opposite. It refers to the phenomenon that sales revenue is higher than product cost and the company makes profits. The reason for the occurrence of cost inversion is generally that the sales of the company's products are affected, and low-price promotions are needed. It may also be that production capacity is insufficient and fixed costs are high, causing product costs to be higher than revenue.