Over 2 million + professionals use CFI to learn accounting, financial analysis, modeling and more. Unlock the essentials of corporate finance with our free resources and get an exclusive sneak peek at the first module of each course.
Start Free
Enter your name and email in the form below and download the free template now!
FIFO Inventory Valuation
This FIFO calculator uses the first-in-first-out method of inventory valuation to come up with an ending inventory value as well as cost of goods sold. As the name implies, this method assumes that the first inventory items that are purchased are the first ones that are pushed out for sale. A practical example of this would be a grocery store. At grocery stores, produce that comes in first is sold first, otherwise, it would perish. Thus, the most recent costs are the ones that remain on the balance sheet while older ones are expensed first.
Consider the grocery store example mentioned earlier. Here is an example of the grocery store’s schedule of apple purchases:
June 6, 2019: 100 apples purchased at $1.20/apple
June 7, 2019: 100 apples purchased at $1.45/apple
June 9, 2019: 100 apples purchased at $1.10/apple
If by June 10th, this grocery store sold 220 apples, what would its inventory value and COGS be?
We can calculate this by applying the FIFO method used in CFI’s FIFO calculator.
Following the schedule above, we can calculate the cost of the remaining apples and the cost of goods sold.
June 6, 2019: 100 apples sold at $1.20/apple = $120 in COGS
June 7, 2019: 100 apples sold at $1.45/apple = $145 in COGS
June 9, 2019: 20 apples sold at $1.10/apple = $22 in COGS
Therefore, total cost of goods sold would be 120+145+22 = $287 and the remaining inventory value would be 80*1.1 = $88.
More Free Templates
Thank you for reading CFI’s guide to FIFO Calculator. For more resources, check out our business templates library to download numerous free Excel modeling, PowerPoint presentations, and Word document templates.
To master the art of Excel, check out CFI’s Excel Crash Course, which teaches you how to become an Excel power user. Learn the most important formulas, functions, and shortcuts to become confident in your financial analysis.
Launch CFI’s Excel Crash Course now to take your career to the next level and move up the ladder!
Take your learning and productivity to the next level with our Premium Templates.
Upgrading to a paid membership gives you access to our extensive collection of plug-and-play Templates designed to power your performance—as well as CFI's full course catalog and accredited Certification Programs.
Gain unlimited access to more than 250 productivity Templates, CFI's full course catalog and accredited Certification Programs, hundreds of resources, expert reviews and support, the chance to work with real-world finance and research tools, and more.