Ending inventory is what remains in your stockroom at the end of an accounting period. This number is generating by adding beginning inventory and purchases, then subtracting sold inventory.
How to Calculate the Ending Inventory?
To calculate the ending inventory, the new purchases are added to the ending inventory, minus the cost of goods sold. This provides the final value of the inventory at the end of the accounting period.
The ending inventory is based on the market value or the lowest value of the goods that the business possesses.
Ending Inventory Formula
The formula for the calculation of Ending Inventory is given by the following equation:
Ending Inventory = Beginning Inventory + Purchases -Cost of Goods Sold (COGS)