posted on 06-06-2019

Beginning Inventory

Updated October 1, 2019

What is Beginning Inventory?

Beginning inventory refers to the value of goods that a company has for its use or sale at the start of an inventory accounting period.

How Does Beginning Inventory Work?

Say Company XYZ produces 5,000 units during the course of a year and sells 2,000 units. The following year, Company XYZ will have a beginning inventory of 3,000 units.

Why Does Beginning Inventory Matter?

Beginning inventory is an important indicator of what a company will be ordering for the upcoming year. It can also be used to project coming costs for a company to ramp up production or coming revenues for its suppliers.


Read This Next

5 Credit Cards That Will Pay You Hundreds Just For Signing Up (2019)
What's even better than earning rewards for spending on your credit cards? Getting paid hundreds of ...
The Top 4 Balance Transfer Credit Cards for 2019
Tired of dragging credit card debt around with you? Taking 15 minutes to transfer your debt to a cre...
The 5 Best Rewards Credit Cards for 2019
If you're going to spend money anyway, then why not get paid for it? Whether you're looking for c...

Related Definitions

Sale
A sale is the transfer of title to a piece of property or performance of a service in return for compensation. In the retail world, a sale means a temporary... See More
Inventory
Inventory is the collection of unsold products waiting to be sold. Inventory is listed as a current asset on a company's balance sheet. See also inventory... See More
Accounting Period
An accounting period is the time interval reflected by the data in a financial statement. See More
Year
In the business world, a year is a 12-month period, four-quarter period, or 13-period stretch of time. It is not always 365 days long, though it is usually... See More
Will
A will is a legal document that indicates how a person wants his or her estate (money and property) to be distributed after death. Wills must expressly state... See More
Will
A will is a legal document that indicates how a person wants his or her estate (money and property) to be distributed after death. Wills must expressly state... See More
Year
In the business world, a year is a 12-month period, four-quarter period, or 13-period stretch of time. It is not always 365 days long, though it is usually... See More
Ramp Up
A ramp up is an increase in the amount of products or services a company sells, usually by expansion into new markets or geographic regions. See More

Popular Articles
Investing
Financial Statement Analysis for Beginners
Investing
15 Financial Ratios Every Investor Should Use
Investing
Calculating Internal Rate of Return Using Excel or a Financial Calculator
Personal Finance
5 Common Sense Lotto Realities Everyone Ignores
Loans
How to Calculate a Monthly Loan Payment in Excel (Mortgage, Car Loan, and More)
Investing Calculator
Simple Savings Calculator: How Much Could I Save Up Over Time?
Investing Calculator
Million Dollar Savings Calculator: How Much Do I Need To Save to Become a Millionaire?
Loans Calculator
Car Loan Calculator: What Will My Monthly Principal & Interest Payment Be?
Loans Calculator
Loan Interest Calculator: How Much Interest Will I Pay My Lender?
Mortgage Calculator
Mortgage Calculator: What Will My Monthly Principal & Interest Payment Be?
Copyright © 2020. InvestingAnswers, Inc. All Rights Reserved