Ending Inventory Calculator
Calculate final inventory value for accurate financial reporting and inventory management
Calculate Ending Inventory
Inventory Input Parameters
Value of inventory at period start
New inventory purchased during period
Direct costs of goods sold during period
Ending Inventory Results
Ending Inventory Formula Calculation
Ending Inventory = Beginning Inventory + Net Purchases - Cost of Goods Sold
Step 1: Total Available = $0.00 + $0.00 = $0.00
Step 2: Ending Inventory = $0.00 - $0.00 = $0.00
Inventory Turnover: $0.00 ÷ $0.00 = 0.00x
Inventory Analysis
Inventory Valuation Methods
Note: FIFO and LIFO estimates assume 5% price variance. Actual values depend on specific cost changes and inventory composition.
Example: Monthly Inventory Calculation
Company Inventory Data
Beginning Inventory: $25,000
Net Purchases: $30,000
Cost of Goods Sold: $40,000
Ending Inventory: $15,000
Average Inventory: $20,000
Inventory Turnover: 2.0x
Step 1: Total Available
Beginning: $25,000
+ Purchases: $30,000
= Total: $55,000
Step 2: Calculate Ending
Total Available: $55,000
- COGS: $40,000
= Ending: $15,000
Step 3: Turnover Analysis
Average Inventory: $20,000
COGS: $40,000
Turnover: 2.0x
Interpretation: With $15,000 in ending inventory and a turnover rate of 2.0x, the company sells its average inventory twice per year. This indicates moderate inventory efficiency, with approximately 182 days to turn inventory into sales.
Inventory Components
Beginning Inventory
Value of inventory at the start of the accounting period
From previous period's ending inventory
Net Purchases
Cost of new inventory acquired during the period
Purchases minus returns and allowances
Cost of Goods Sold
Direct costs of inventory sold during the period
Materials, labor, and production costs
Inventory Valuation Methods
FIFO: First-in, First-out - newer costs remain in inventory
LIFO: Last-in, First-out - older costs remain in inventory
Weighted Average: Blended cost of all inventory items
Specific ID: Actual cost of specific inventory items
Inventory Turnover Guidelines
High Turnover (12+): Excellent efficiency, minimal holding costs
Good Turnover (6-12): Healthy inventory movement
Average (3-6): Moderate efficiency, room for improvement
Low (<3): Slow movement, high holding costs
Understanding Ending Inventory
What is Ending Inventory?
Ending inventory represents the monetary value of unsold goods remaining at the end of an accounting period. It appears on the balance sheet as a current asset and directly impacts the calculation of cost of goods sold on the income statement.
Ending Inventory Formula
Ending Inventory = Beginning + Purchases - COGS
Where:
Beginning = Starting inventory value
Purchases = Net inventory acquired
COGS = Cost of goods sold
Key Applications
Financial Reporting
Balance sheet preparation and asset valuation
Inventory Management
Stock level monitoring and turnover analysis
Cost Control
COGS calculation and profitability analysis
When to Calculate Ending Inventory:
- ✓Monthly, quarterly, or annual financial reporting
- ✓Inventory turnover and efficiency analysis
- ✓Tax preparation and compliance
- ✓Business valuation and asset assessment
Industry Applications:
- •Retail and wholesale businesses
- •Manufacturing and production companies
- •Distribution and logistics operations
- •E-commerce and online retailers