Closing Inventory is a business term that refers to the total value of all unsold goods at the end of an accounting cycle, usually at the close of each fiscal year. It is important for businesses to keep track of their closing inventory in order to accurately assess the profitability and sustainability of their operations. When calculating closing inventory, businesses must include raw materials, work-in-progress, finished goods, supplies, and any other items that could be considered part of the cost of goods sold. Having an accurate figure of closing inventory helps ensure that a business’s financial records are up-to-date and can provide crucial insight when making critical decisions about production or strategic growth.