Beginning Inventory + Purchases is a term used to describe the resources and supplies required for a company’s daily operations. It refers to the total expenses incurred by a company when buying goods or services needed to do business on a day-to-day basis. This includes items such as raw materials, inventory, and any other capital investments made in equipment, furniture, or software. The sum of these items is compared to the ending inventory amount at the end of an accounting period to determine the net change in inventory levels. Understanding and tracking this calculation is essential to managing a business’ finances successfully.