Definition
Inventory valuation (average cost)
Inventory valuation is the total cost of the stock you hold; average cost values each unit at the running average of what you paid for that item.
The alternatives are FIFO (first in, first out) and LIFO. Average cost is the simplest for a small shop whose purchase prices move a little each order, and it is what most inventory apps use by default.
Valuation matters at tax time, for insurance, and for knowing how much cash is tied up on the shelf.
In Inventory Now
The summary shows current inventory value at cost and at retail for any filter.
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