FIFO Calculator

Enter up to 5 inventory batches — each with units purchased and unit cost — plus the units sold, and this FIFO Calculator applies the First-In, First-Out method to compute your Cost of Goods Sold (COGS), ending inventory value, and total cost of goods purchased. The oldest inventory is consumed first, so you always see which batches were used and what remains.

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Total number of units sold from your inventory using FIFO order.

Results

Cost of Goods Sold (COGS)

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Ending Inventory Value

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Total Cost of Goods Purchased

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Total Units Purchased

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Remaining Units in Inventory

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COGS vs Ending Inventory Value

Results Table

Frequently Asked Questions

What is the FIFO method?

FIFO stands for First-In, First-Out. It is an inventory valuation method that assumes the oldest inventory items are sold first. When you sell goods, the cost of those goods is calculated using the price of the earliest purchases, while the ending inventory reflects the most recently acquired stock.

How do I calculate COGS using FIFO?

To calculate COGS with FIFO, start with your oldest inventory batch and allocate units sold against it first. Once a batch is exhausted, move to the next oldest batch and continue until all units sold are accounted for. Sum the costs of all units allocated to sold goods — that total is your COGS.

How do I calculate ending inventory using FIFO?

Ending inventory under FIFO consists of the most recently purchased units that were not sold. Subtract total units sold from total units purchased to find remaining units, then apply those remaining units to the most recent batches (working backwards) and multiply by their respective unit costs.

How does inflation affect FIFO ending inventory and COGS?

During inflation, older inventory was purchased at lower prices. FIFO assigns these lower costs to COGS, resulting in higher reported profit compared to LIFO. The ending inventory is valued at the more recent, higher prices, making the balance sheet reflect closer-to-current market values.

How does deflation affect FIFO calculations?

During deflation, older inventory was purchased at higher prices. FIFO will assign those higher costs to COGS, reducing reported profit. Ending inventory will be valued at the newer, lower prices, which may understate the balance sheet value relative to what was actually paid.

How does the FIFO method affect taxable profits?

In an inflationary environment, FIFO typically results in higher taxable profits because older, cheaper inventory is expensed as COGS, leaving a larger gross profit. This can lead to higher tax liability compared to LIFO, though LIFO is not permitted under IFRS accounting standards.

What financial ratios does FIFO affect?

FIFO impacts several key financial ratios. It tends to produce a higher inventory value on the balance sheet (improving the current ratio and working capital), a higher gross profit margin, and better return on assets in inflationary periods — all because ending inventory is valued at more recent, higher costs.

What is the difference between FIFO and LIFO?

FIFO (First-In, First-Out) assumes the oldest inventory is sold first, while LIFO (Last-In, First-Out) assumes the newest inventory is sold first. In inflationary markets, FIFO produces lower COGS and higher profit, whereas LIFO produces higher COGS and lower taxable profit. LIFO is not allowed under IFRS but is permitted under US GAAP.

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