Average Inventory Calculator

Understanding your average inventory is essential for managing stock effectively, improving cash flow, and optimizing logistics.

With our free Average Inventory Calculator, you can quickly determine how much inventory you typically hold over a period.

Beginning Inventory

Ending Inventory

How to Calculate Average Inventory?

The standard average inventory formula is straightforward:

Average Inventory = (Beginning Inventory + Ending Inventory) ÷ 2

Here’s what each term means:

Beginning Inventory: The value of inventory at the start of the period.
Ending Inventory: The value of inventory at the end of the period.

By adding the two figures and dividing by 2, you get a clear estimate of how much inventory you held on average during the period. This metric helps you assess turnover rates, storage holding costs, and capital tied up in stock.

How to Use the Average Inventory Calculator?

Using the calculator is simple and efficient:

Enter your Beginning Inventory value — how much your stock was worth at the start of the period.
Enter your Ending Inventory value — the worth of your stock at the end of the same period.
Click Calculate Average Inventory.

The tool instantly calculates your average inventory and displays the result with a visual chart. You’ll also see the input figures clearly laid out. Use that information to compare periods, see trends, and identify excess inventory.

Examples of Calculating Average Inventory

Example 1: The boutique fashion store

Maria owns a trendy boutique at the start of summer. She begins the season with inventory valued at $20,000. By the end of the season, after sales and restocking, her ending inventory sits at $14,000.

Using the average inventory formula:

Average Inventory = ($20,000 + $14,000) ÷ 2 = $17,000

Maria now knows that on average she held $17,000 worth of stock during the season — and this insight helps her evaluate how fast her merchandise was turning and plan her next ordering cycle more accurately.

Example 2: The artisan coffee roaster

James runs a small-batch coffee roasting business. At the beginning of the quarter, his inventory is valued at $12,500. At the end of the quarter, after shipments and new stock, the ending inventory shows $9,000.

Average Inventory = ($12,500 + $9,000) ÷ 2 = $10,750

With this figure, James understands the average amount of capital tied up in green beans, roasted inventory, and packaging throughout the quarter. He uses it to compare with sales revenue and track his “inventory turnover” ratio over time.

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Looking for Beyond Just Calculating the Average Inventory?

While our Average Inventory Calculator helps with quick and accurate inventory-level estimates, growing businesses often need deeper insight and automation. That’s why we built Enerpize, our all-in-one cloud ERP system.

With Enerpize Online Inventory Management Software, you can:

Track stock levels and item movements in real time.
Automate average inventory calculations linked directly to your purchases and sales.
Manage inventory, suppliers, and expense integration seamlessly.
Get full visibility into your business operations — from inventory to financials.

If you’re ready to go beyond a simple average inventory calculator, try Enerpize for smarter, automated inventory and cost-management in one powerful platform.

Disclaimer

This Average Inventory Calculator is provided for informational and educational purposes only. Results are estimates and may vary depending on accounting methods, inventory valuation practices, and business conditions. For detailed advice on inventory accounting or tax implications, please consult your accountant or financial advisor.

FAQs

What is the formula for calculating inventory?

The standard formula for average stock is:

Average Inventory = (Beginning Inventory + Ending Inventory) ÷ 2

How to calculate the average inventory amount?

To estimate the average inventory value, use:

Average Inventory = (Beginning Inventory + Ending Inventory) ÷ 2

Example:
Beginning Inventory = $20,000
Ending Inventory = $14,000

Average Inventory = (20,000 + 14,000) ÷ 2 = $17,000

How are inventories calculated?

Inventories are calculated by measuring the cost and quantity of goods a business holds at the beginning and end of a period. The common formula for average inventory is:

(Beginning Inventory + Ending Inventory) ÷ 2

What is the average inventory at the selling price?

Average inventory at selling price represents the average retail (selling) value of the inventory held over a specific period, rather than its cost value.

You can calculate it using this formula:

Average Inventory at Selling Price = (Beginning Inventory at Selling Price + Ending Inventory at Selling Price) ÷ 2