Ending Inventory Beginning Inventory Balance COGS + Raw Material Purchases. It means that you have sold the equivalent of your average inventory twice during the accounting period. The formula to calculate the ending inventory balance is as follows. You can now input these values into the ending inventory formula:Į n d I n v = ( s t a r t I n v + n e t P u r c h ) − C O G S \footnotesize endInv = (startInv + netPurch) - COGS e n d I n v = ( s t a r t I n v + n e tP u rc h ) − COGSĮ n d I n v = ( 25, 000 + 30, 000 ) − 40, 000 \footnotesize endInv = (25,000 + 30,000) - 40,000 e n d I n v = ( 25, 000 + 30, 000 ) − 40, 000Īdditionally, you can find the inventory turnover of your business: Let's say it was $30,000.įind out what was the cost of producing the goods you sold during this month.
The ending inventory figure is needed to derive the cost of goods sold, as well as the ending inventory balance to include in a companys balance sheet. Ending Inventory Explained To calculate ending. Ending inventory is the total unit quantity of inventory in stock or its total valuation at the end of an accounting period.
#FORMULA OF CLOSING INVENTORY SOFTWARE#
Let's assume that at the beginning of the month you had $25,000 worth of materials in stock.ĭetermine the net value of purchases made over the month. Inventory management software can automate inventory tracking and simplify the calculation of ending inventory. Start by determining your starting inventory.
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