Inventory Valuation Methods in Accounting is the process of assigning a monetary value to a company’s inventory—the merchandise and goods it holds for sale. There are numerous ways to do this, depending on the type of inventory, such as FIFO (First In First Out), LIFO (Last In First Out) or Weighted Average Cost. This helps businesses report their income and costs accurately and monitor the cash flow of their operations. It also forms a key part of the financial records used to set yearly budgets and determines the best value of your stock. By leveraging Inventory Valuation Methods in Accounting, business owners can maximize their profits and stay on top of their finances.