ending inventory calculation

ending inventory calculation refers to the method of determining the value of a business’s inventory at the end of an accounting period. When users search for “ending inventory calculation,” they are looking for guidance on how to calculate the value of the goods remaining in stock. Ending inventory is essential for financial reporting, as it affects the cost of goods sold (COGS) and the company’s overall profit. One common method for calculating ending inventory is the FIFO (First-In, First-Out) method, where the oldest items in inventory are considered sold first. Another method is LIFO (Last-In, First-Out), where the most recent purchases are considered sold first. Alternatively, the weighted average method can be used. To calculate ending inventory, businesses subtract the cost of goods sold from the total value of inventory at the beginning of the period, taking into account any purchases or returns made during the period.