Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Beginning Inventory

What it is:

Beginning inventory refers to the value of goods that a company has for its use or sale at the start of an inventory accounting period.

How it works (Example):

Say Company XYZ produces 5,000 units during the course of a year and sells 2,000 units. The following year, Company XYZ will have a beginning inventory of 3,000 units.

Why it Matters:

Beginning inventory is an important indicator of what a company will be ordering for the upcoming year. It can also be used to project coming costs for a company to ramp up production or coming revenues for its suppliers.