Ending Inventory Calculator
From opening inventory, purchases and COGS, compute the closing inventory using the basic inventory formula.
Input Data
Results
At a glance:Ending inventory = opening inventory + purchases − COGS. It is the basic inventory identity, the mirror of the COGS identity (COGS = opening + purchases − ending). Use it for period-end stocktaking, gross-margin checks and inventory accounting. A negative result usually means an input error or stockout and should be reviewed.
Formula
Ending inventory = Opening inventory + Purchases − COGS.
COGS = Opening inventory + Purchases − Ending inventory (equivalent).
How to Use
- Enter the opening inventory value.
- Enter purchases during the period.
- Enter the COGS for the period.
- View the closing inventory.
Ending inventory at different inputs (HK$)
| Opening | Purchases | COGS | Ending inventory |
|---|---|---|---|
| 100,000 | 300,000 | 250,000 | 150,000 |
| 50,000 | 200,000 | 280,000 | -30,000 |
| 80,000 | 150,000 | 190,000 | 40,000 |
Ending = opening + purchases − COGS. The second row is negative — usually an input error or stockout to review, not a real negative stock.
Case Studies
Case 1: Ending inventory and gross margin
A shop: opening HK$100,000, purchases HK$300,000, COGS HK$250,000. Ending = 100,000 + 300,000 − 250,000 = HK$150,000.
Cross-check: COGS = opening + purchases − ending = 100,000 + 300,000 − 150,000 = 250,000 — matches, identity balanced.
If revenue is HK$400,000, gross profit = 400,000 − 250,000 = HK$150,000, gross margin 37.5%. A wrong ending inventory would distort COGS and the margin, so ending inventory is the pivot linking profit and stock.
Case 2: A negative result is an alert, not negative stock
Another period: opening HK$50,000, purchases HK$200,000, COGS HK$280,000. Ending = 50,000 + 200,000 − 280,000 = HK$−30,000.
Physical stock cannot be negative, so this is an alert: likely the COGS was overstated, purchases understated, or a stockout not recorded.
Practice: recheck the inputs rather than accept '−30,000'. Once corrected (e.g. COGS should be 230,000), ending = 20,000, sensible. This calculator only does the identity; for true ending value under FIFO/WAC use the method calculators and reconcile with physical stock.
FAQ
What is the relationship between ending inventory and COGS?
They are two sides of the same accounting identity: COGS = opening + purchases − ending; equivalently ending = opening + purchases − COGS. Larger COGS leaves less ending inventory; more purchases raises ending inventory. The identity must balance, so ending inventory and COGS are mutually checked in stocktaking and gross-margin review.
Why can ending inventory be negative?
In the formula, if COGS exceeds opening + purchases, ending turns negative — physically impossible, so it usually signals an input error, a stockout not recorded, or mis-counted COGS. Treat a negative result as an alert to recheck figures; it does not mean 'debt'.
Does this calculator apply FIFO or weighted average?
This calculator only uses the quantity identity (opening + purchases − COGS) and does not pick a costing method. Under FIFO, weighted average or specific identification, the ending inventory value differs. This tool gives the balance identity result; for method-based valuation use the FIFO/WAC calculators.
Why is ending inventory a core accounting pivot?
Ending inventory is far more than a closing number — it sits at the junction of the income statement and the balance sheet and directly drives several figures. On the income statement, COGS = opening + purchases − ending; the larger the ending inventory (more left unsold), the lower the COGS, the higher the gross profit and pre-tax profit — so ending inventory is a lever on profit. On the balance sheet it is current assets (stock), affecting working capital and current ratio. On cash flow, a rising inventory ties up cash (negative operating swing); a falling inventory releases cash. So a miscounted ending inventory distorts profit, assets and cash flow at once. This calculator uses the identity (opening + purchases − COGS) to size it; for true value under FIFO/WAC use the method calculators. In practice also reconcile physical stock with the book figure and investigate variances.
How do I use it with the COGS identity to check the gross margin?
Ending inventory and COGS are two outputs of one identity and together let you check the gross margin. Steps: (1) from records, opening inventory + purchases − ending inventory = COGS (this calculator does the reverse; either way they must balance); (2) gross profit = revenue − COGS, gross margin = gross profit ÷ revenue. If the ending inventory is wrong, COGS is wrong and so is the gross margin. Practical check: compute ending inventory two ways — physical stock valued by method, and the identity (opening + purchases − COGS from sales) — and compare; a big gap suggests mis-counted sales, purchases or stock. For method-based ending value (FIFO/WAC) use the dedicated calculators; keep the identity as a cross-check. Note the identity gives the balance figure, not the costing method's value — under FIFO/WAC the ending value differs, so pair them.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.