Enter the total starting value of an inventory, the net purchases and the cost of goods sold to calculate the ending inventory and turnover.

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## Ending Inventory Formula

The following formula can be used to calculate the ending inventory value.

Ending Inventory = (BI+ NP) – (CG)

- Where BI is the initial inventory amount ($)
- NP is the net purchases ($)
- CG is the cost of goods sold ($)

The inventory turnover can than further be calculated using the ending inventory, beginning inventory, and cost of goods sold.

## Ending Inventory Definition

An ending inventory is defined as the total value of an inventory of goods after a certain time period of sales.

## How to calculate Ending Inventory?

How to calculate Ending Inventory

**First, determine the initial inventory value**This will involve taking a count of every piece of inventory that is currently stored and multiplying it by the price of those goods. This will yield the initial inventory value.

**Next, determine the total net purchases**This will be equal to the total number of items sold multiplied by the price of those items.

**Find the cost of the goods sold**This is the cost, including operating and raw material costs of a good.

**Finally, calculate the ending inventory**Enter the information from steps 1-3 into the formula or calculate above to determine the ending inventory value.

## FAQ

**What is ending inventory?**

An ending inventory is a monetary value used to describe the total worth of a warehouse or storage of goods after a certain number of those goods have been sold.

**What is inventory turnover?**

Inventory turnover is a ratio that measures the change in value of an inventory over time. The higher the inventory turnover, the more product is being shipped or sold out.

**What is a good ending inventory?**

The lower the ending inventory the more goods are being sold. This will result in higher profits.