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Question

Available To Promise - What is the new inventory formula?

Answer

The corrected formula for starting inventory is as follows: beginning inventory equals cost of goods sold (COGS) plus end-of-period inventory minus inventory purchases. Here, cost of goods sold (COGS) is the cost of goods sold; ending inventory is the value of inventory at the conclusion of the accounting cycle; and purchases are the sum of all purchases made to stock throughout the accounting period.