Glossary
Stock valuation
Stock valuation is working out what the goods in store are worth at cost, meaning each item quantity times what you paid for it.
What it means for a shop owner
Stock value appears on the balance sheet and drives the cost of goods sold. When the buying price changes between deliveries you need one costing method and you stick to it, such as weighted average or first in, first out, so figures stay comparable.
A worked example
You hold 20 pieces costing 5 and 10 pieces costing 8. Stock value = 100 + 80 = 180, and the average cost = 180 ÷ 30 = 6 per piece.
Related
- InventoryInventory software for shops: branches and expiry
- AccountingShop accounting software: entries write themselves
- First in, first out (FIFO)First in, first out (FIFO): definition and example
- Cost of goods soldCost of goods sold: definition and example
- Balance sheetBalance sheet: definition and example
- Average costAverage cost: definition and example
Try it in your shop, free, no card.
The free plan: the whole shop for one branch, an offline cashier with stock, debts and accounting, with a daily limit on invoices, expenses and purchase orders. What it includes