Updated: September 30, 2026 A retailer counting 500 units on the shelf at year-end can report three different ending inventory values from that exact same stock, depending on whether they use FIFO, LIFO, or Weighted Average. None of the three methods is wrong. But using the wrong one for your business, or switching between them without realizing it, is one of the fastest ways to distort a balance sheet without anyone noticing until the numbers stop adding up. Key Takeaways 📋 Table of Contents What Is Ending Inventory? Why It Matters How to Calculate Ending Inventory: The Four Methods Common Mistakes
