Ending Inventory Calculation is the process of determining the value of a business’s inventory at the end of an accounting period. This calculation helps provide insight into the amount of goods available to be sold, as well as how much money may be tied up in unsold items. To calculate Ending Inventory, businesses must first determine their beginning inventory for the period, then add in any purchase or production costs associated with acquiring new inventory during the period, and subtract the cost of any sales made from the inventory. This final number represents the total value of inventory a business has on hand when the period ends. Understanding your Ending Inventory is critical for making accurate financial forecasts.