How do you calculate finished goods inventory?
Take opening finished goods, add the cost of goods manufactured during the period, then subtract cost of goods sold. What remains is closing finished goods: everything produced and not yet sold, valued at cost.
Finished Goods Inventory Calculator formula
Closing finished goods = Opening finished goods + Cost of goods manufactured - Cost of goods sold
Worked example: Opening 30,000 plus 120,000 manufactured less 110,000 sold leaves 40,000 in closing finished goods.
How this works in your browser
Closing finished goods is opening balance plus cost of goods manufactured minus cost of goods sold, the standard inventory flow identity. Every term is at cost rather than selling price, which is what keeps the result consistent with how inventory appears on a balance sheet. The calculation deliberately reports the derived figure rather than reconciling it to a physical count, because that difference is shrinkage and belongs in your stock records as a distinct number. Computed in your browser.
Who uses Finished Goods Inventory Calculator
Period-end accounts
Produce the closing inventory figure for your balance sheet.
Manufacturing businesses
Track completed stock separately from work in progress.
Identifying shrinkage
Compare the calculated figure against a physical count.
Feeding stock ratios
Supply the closing inventory that turnover calculations need.
Frequently asked questions
How is finished goods inventory calculated?
Opening finished goods plus cost of goods manufactured, minus cost of goods sold. It is a flow calculation: what you started with, plus what you completed, minus what left the building.
What is cost of goods manufactured?
The total production cost of units completed during the period: direct materials, direct labour and manufacturing overhead, adjusted for the change in work in progress. Only completed units count, which is why work in progress is tracked separately.
What if my calculated figure does not match my stock count?
The physical count wins, and the difference is shrinkage: damage, theft, miscounting or unrecorded scrap. That gap is information rather than an error to paper over, and a persistent one usually points at a specific process.
How should finished goods be valued?
At the lower of cost and net realisable value under most accounting standards, meaning that if stock can no longer be sold for what it cost to make, it must be written down. Carrying obsolete stock at full cost overstates both your inventory and your profit.
Are my figures uploaded?
No. Everything is calculated locally in your browser.