FIFO vs LIFO Inventory Valuation Calculator

About this calculator

FIFO (first-in, first-out) assumes the oldest inventory units are sold first, so the units left in stock are valued at the most recent purchase costs. LIFO (last-in, first-out) assumes the opposite — the newest units are sold first, leaving older, often cheaper costs in ending inventory. In periods of rising prices, FIFO tends to report lower cost of goods sold (COGS) and higher ending inventory value than LIFO.

This calculator takes a beginning inventory layer and a purchase layer, each with its own quantity and unit cost, plus the number of units sold, and values ending inventory and COGS under both methods side by side. Accountants, bookkeepers, and small business owners use it to see how the choice of costing method changes reported profit and tax liability for the same physical inventory.