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The term "inventory calculation" is often used in accounting or finance. It is the process of determining the inventory or inventory balance of a company or business. The main purpose of this process is to calculate the cost of the remaining goods for a certain period.

There are different approaches and methods for calculating inventory. Below I will explain the most common methods and how to calculate them:

1. FIFO (First In, First Out) – First In, First Out.

Under this method, the items purchased first are considered to be sold first. That is, goods purchased earlier are sold earlier than goods purchased later.

Calculation:

• The price of an item sold is calculated based on the price of the first item purchased.
• The remaining item is displayed at the price of the last item purchased.

1. LIFO (Last In, First Out) - last to come, first to leave.

This method assumes that the last items purchased are sold first. That is, the most recently purchased items are sold first.Calculation:• The price of an item sold is calculated based on the price of the last item purchased.• The remaining item is listed at the price of the previously purchased item.2.       Weighted average methodThis method calculates the average price of all items purchased and uses this price to determine inventory and cost of goods sold.Calculation:• To calculate the average purchase price: Average price=Cost of all items purchased Quantity of all items purchasedAverage price=Quantity of all items purchased Cost of all items purchasedThe price of goods sold is calculated based on the average price.4. Last purchase price method (special identification method)In this method, after tracking, the specific price of each product and the price of other products for a certain period are calculated. The price of each product is known and sales are calculated based on this price.Calculation:• The selling price is calculated based on the purchase price of each product.