What is inventory value?

Point of Sale (POS) Glossary

Inventory value can be calculated in many different ways. The most simple accounting is the amount that stock cost when it was purchased, multipled by the amount of stock left. Another way it could be determined is the amount the items are currently worth to the business. Still, another way to calculate the value may be an average of the items’ cost, for instance, if SKUs were purchased at different prices.

Inventory may expire or be damaged, and under some valuation schemes, that might change the basis for the items’ cost. However a merchant chooses to calculate the value, a point of sale system that tracks inventory and costs can be helpful. A POS system with real-time inventory tracking knows exactly what is left at any time, making it much easier to calculate exact inventory value.