Ending Inventory Formula

Ending Inventory or Closing Inventory shows those goods that remain unsold at the end of accounting cycle. It is calculated by adding Opening Inventory to Inventory Purchases minus Cost of Goods Sold (Cost of Sales).

Mathematically, we can use the following Ending Inventory Formula to calculate ending inventory for the accounting cycle as shown below:

Closing Inventory = Opening Inventory + Inventory Purchases - Cost of Sales

Ending inventory is recorded on Balance Sheet at the end of the accounting period as a Current Asset.