The ending inventory calculator takes starting inventory, cost of goods sold and net purchases and returns inventory turnover and ending inventory. It is built for quick answers, for checking somebody else’s arithmetic, and for the moments when a formula book is not within reach.
What Is the Ending Inventory Calculator?
The ending inventory calculator takes starting inventory, cost of goods sold and net purchases and turns them into inventory turnover and ending inventory.
It is the kind of calculation you would otherwise do on the back of an envelope: mechanical, repeatable and easy to get subtly wrong without noticing.
How the Ending Inventory Figure Is Built
Each result is calculated from the ones before it, so the working is fully visible. That matters when the answer is going to be quoted to somebody else and you need to be able to explain where it came from.
The figures are exactly as good as the assumptions underneath them. Check the rates, the periods and the tax treatment before you rely on the result.
Reading the Result Sensibly
A small change in an input can move the result by much more than you would expect, particularly where the calculation divides by one of the figures you supplied. That is worth understanding before you rely on a figure.
For anything that will be committed to, write the inputs down beside the result. A number you can reproduce is worth far more than one you cannot explain.
A Worked Example
Working through an example, with starting inventory set to 10, cost of goods sold set to 5, net purchases set to 2, the calculator returns ending inventory of 7, and inventory turnover of 0.58824. Substitute your own figures and the same steps produce the same kind of answer.
Frequently Asked Questions
What do I need to work out inventory turnover?
Enter starting inventory, cost of goods sold and net purchases. The calculator then works through the relationship and reports inventory turnover and ending inventory.
What does the ending inventory actually calculate?
It takes starting inventory, cost of goods sold and net purchases and converts them into inventory turnover and ending inventory using the standard relationship for this problem. Each step is applied in turn, so every output is traceable back to the numbers you typed in.
How should I enter starting inventory?
Use the value you actually have, in the unit shown next to the field. Enter every value in the same unit system. The calculator assumes the figures you supply are consistent, so it cannot correct a mistake that happens before the calculation starts.
Does anything you type get stored?
No. The whole calculation runs inside your browser, and nothing you enter is uploaded, logged or sent anywhere.
Is the answer exact?
It is as exact as the formula and the inputs allow. The method itself is the standard one for this problem, so the only sources of error are the figures you enter and the precision you ask for.