Inventory Cost Valuation – Excel Example

Inventory-Cost-Valuation

Inventory includes raw materials, work-in-progress, and finished goods. The way firms value their stock has a direct impact on the costs of goods sold, inventory ending value, and hence overall profitability.

This template illustrates how inventory purchase prices affect inventory costs, under three different cost flow methods:

  • First-In, First-Out (FIFO)
  • Last-In, First-Out (LIFO)
  • Weighted Average Cost (WAVCO)

In Scenario 1 – we calculate and compare COGS, Gross Profit, and Inventory Closing Balance under the assumption of rising prices (inflationary environment).

In Scenario 2 – we calculate and compare COGS, Gross Profit, and Inventory Closing Balance under the assumption of falling prices (deflationary environment).

Some other related topics you might be interested to explore are Inventory Cost valuation.

This is an open-access Excel model in XLSX format that will be useful for anyone who wants to work as an Accountant, Financial Analyst, or Finance Manager.

You can now download the Excel template for free.

Inventory cost valuation is included in the Financial Reporting module of the CFA Level 1 Curriculum.

3-Statement Model – Excel Template

The P&L, Balance sheet, and Cash flow statements are three interrelated parts. The P&L feeds net income on the

3-Statement Model – Excel Template

The P&L, Balance sheet, and Cash flow statements are three interrelated parts. The P&L feeds net income on the liabilities and equity side of the Balance sheet. At the same time, we obtain Cash (an asset) by summing the bottom-line result of the Cash flow statement with previous year...
Learn More

Cash Flow – Excel Template

The cash flow statement shows how a company generated and spent cash throughout a given timeframe. An important truth

Cash Flow – Excel Template

The cash flow statement shows how a company generated and spent cash throughout a given timeframe. An important truth that is frequently neglected by inexperienced business owners is that profit does not equal cash. Every business owner and manager needs to have a clear idea of the cash flows...
Learn More

Balance Sheet – Excel Template

If the P&L statement shows how profitable a company was over a given timeframe, we can say that the

Balance Sheet – Excel Template

If the P&L statement shows how profitable a company was over a given timeframe, we can say that the Balance sheet is like a momentary picture of the firm’s condition at the time of preparation. The Balance sheet shows what a company owns (assets) and what it owes (liabilities...
Learn More