Accounting Share · Inventory & purchasing
Retail Inventory Method Calculator
Estimate closing inventory at cost from a retail stock value and a cost-to-retail ratio. This is a simplified basic retail method.
The interactive calculator requires JavaScript. The formula and worked example below remain available.
01 / Enter your figures
Make the numbers yours.
Use one currency and consistent time periods. Amounts are shown in your input currency units; no currency conversion is performed.
02 / See the working
Your calculation
Enter your figures, then choose Calculate. Or load the worked example.
03 / Understand the method
Formula and method
Estimated ending inventory = (Retail available − Retail sales) × Cost-to-retail ratio
Estimate closing inventory at cost from a retail stock value and a cost-to-retail ratio. This is a simplified basic retail method.
How to use this calculator
- Collect the figures for the same entity, currency and reporting period.
- Enter each input using its label and unit. For percentages, enter 15 to mean 15%.
- Choose Calculate, inspect the breakdown and compare the result with your assumptions.
- Change one input to explore a scenario. Recalculate after edits; display rounding does not round the underlying calculation.
Inputs at a glance
- Goods available at cost: A nonnegative numeric input in the units specified by the label.
- Goods available at retail: A nonnegative numeric input in the units specified by the label.
- Net sales at retail: A nonnegative numeric input in the units specified by the label.
Worked example
Follow one calculation.
- Goods available at cost
- 60000
- Goods available at retail
- 100000
- Net sales at retail
- 70000
- Calculated result
- 18,000
Load this example in the interactive form to inspect the intermediate amounts.
Assumptions and interpretation
Markups, markdowns, shrinkage and different retail-method variants require appropriate adjustments. Do not treat this estimate as a replacement for stock controls.
The output is a model based on the figures entered. Check source records and use the accounting or contractual definitions relevant to your task before relying on a result.
Questions about this tool
What does the retail inventory method calculation measure?
Estimate closing inventory at cost from a retail stock value and a cost-to-retail ratio. This is a simplified basic retail method.
Which assumptions can change the result?
Markups, markdowns, shrinkage and different retail-method variants require appropriate adjustments. Do not treat this estimate as a replacement for stock controls.
Why can displayed totals differ slightly from my spreadsheet?
Calculations use the unrounded input values. Only the display is rounded. Use four or six decimal places to inspect small differences, and check the timing, sign conventions and rounding policy in your spreadsheet.
Reference and further learning
Inventory reporting reference: IAS 2. These original learning examples apply the displayed formula; the reference does not certify or endorse this calculator.
Look up an accounting term · Practise with accounting questions
Formula and worked example checked 4 November 2026. Calculations run in your browser without sending the entered figures to Accounting Share. Report a calculation issue with the tool name, example inputs and expected result; avoid sharing confidential records.
