LIFO Calculator

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LIFO Calculator

This LIFO calculator will help you calculate the remaining value of your inventory as well as cost of goods sold using the last-in-first-out method.

Here is a preview of CFI’s LIFO calculator below:

LIFO Inventory Value Calculator Preview

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LIFO Inventory Valuation

This LIFO calculator uses the last-in-first-out method of inventory valuation to determine ending inventory value and cost of goods sold. This method assumes that the last inventory items that are purchased are the first ones to be sold.

A practical example of a store that uses LIFO would be a pharmacy. Pharmaceutical products tend to experience high inflation in prices. Thus, it is most accurate for them to report based on the most recent prices of their inventory purchases. Therefore, the oldest costs are the ones that remain on the balance sheet while the most recent ones are expensed first.

Consider the pharmacy example mentioned above. Here is an example of the pharmacy’s schedule of pill purchases:

  • July 6, 2019: 100 pills purchased at $1.15/pill
  • July 7, 2019: 100 pills purchased at $1.65/pill
  • July 9, 2019: 100 pills purchased at $2.25/pill

If by July 10th, this pharmacy sold 220 pills, what would its inventory value and COGS be?

We can calculate this by applying the LIFO method used in CFI’s LIFO calculator.

Following the schedule above, we can calculate the cost of the remaining pills and the cost of goods sold.

  • July 9, 2019: 100 pills sold at $2.25/pill = $225 in COGS
  • July 7, 2019: 100 pills sold at $1.65/pill = $165 in COGS
  • July 6, 2019: 20 pills sold at $1.15/pill = $23 in COGS

Therefore, total cost of goods sold would be 225+165+23 = $413 and the remaining inventory value would be 80*1.15 = $92.

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Analyst Certification FMVA® Program

Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.

 

Financial Analyst certification curriculum

 

A well rounded financial analyst possesses all of the above skills!

 

Additional Questions & Answers

CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.

In order to become a great financial analyst, here are some more questions and answers for you to discover:

 

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