How do I use this calculator?
Choose the value to calculate in Solve for, then enter the two required values. The beginning/ending inventory modes use matching units or values at cost.
Calculator Operations:
- Enter the beginning and ending inventory to calculate the average inventory.
- Enter the average inventory and ending inventory to calculate the beginning inventory.
- Enter the average inventory and beginning inventory to calculate the ending inventory.
The other modes calculate inventory turnover from cost of goods sold and average inventory valued at cost, or days sales of inventory as days in period divided by turnover. Reverse modes solve for the other quantities. Use the same accounting period and currency throughout; these ratios do not calculate an optimal inventory level.
Use the calculate button when all known values have been entered and use the reset button when you want to clear the values from the calculator.
Calculate average inventory from beginning and ending inventory, or solve for either snapshot, inventory turnover, COGS or days sales of inventory.
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Average Inventory Formula
The following two example problems outline the steps and information needed to calculate the Average Inventory.
Variables:
- AI is the Average Inventory (matching units or value at cost)
- BI is the beginning inventory
- EI is the ending inventory
To calculate Average Inventory, sum the beginning inventory and ending inventory values, then divide by 2.
How to Calculate Average Inventory?
The following steps outline how to calculate the Average Inventory.
- First, determine the beginning inventory.
- Next, determine the ending inventory.
- Next, gather the formula from above = AI = (BI + EI) / 2.
- Finally, calculate the Average Inventory.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
beginning inventory = 30
ending inventory = 100
AI = (BI + EI) / 2 = (30 + 100) / 2 = 65
