Stock Value is the total value of your available unsold stock. When you purchase a product from multiple vendors at different prices, but sell them at your price, you want to know the value of your product in stock based on the purchase price. Doing this for each product is not the right approach. 

Stock Valuation Method is a way to know the value of your current stock. In Zenoti, you can know the stock value using one of the following two methods: 

FIFO 

FIFO abbreviates to First In First Out - stock brought first is sold first. It removes your oldest products from stock first .

For example, if your company has purchased 30 bottles of Hair Shampoo at different prices, from different vendors:

  • Vendor 1 @ $5 (10 bottles) 
  • Vendor 2 @ $6 (10 bottles)
  • Vendor 3 @ $7 (10 bottles)

If your front desk has sold 15 bottles throughout the year, using the FIFO valuation method, the value of the unsold inventory is calculated as follows,

  • 10 bottles are sold from the order received from Vendor 1 at $5 each. The total cost is (10x5)=$50 
  • 5 bottles are sold from the order received from Vendor 2 at $ 6 each. The total cost in this case is (5x6) = $30 

The unsold products in the stock are 15. In this stock, there are 5 products that were purchased from Vendor 2 @$6 and 10 bottles were purchased from Vendor 3 @ $7. So, the value of the unsold stock is:

(5 x 6) + (10 x7) = 30 + 70 = $100

Average

Using the average cost method, the current stock is valued by calculating the average unit cost of all products over a period of time. 

For example, if your company has purchased 30 bottles of Hair Shampoo at different prices from different vendors:

  • Vendor 1 @ $5 (10 bottles) 
  • Vendor 2 @ $6 (10 bottles)
  • Vendor 3 @ $7 (10 bottles)

If your front desk has sold 15 bottles throughout the year, using the Average valuation method, the value of the unsold inventory is calculated as follows,

5 + 6 + 7 /3 = 18/3 = $6

So, each unsold bottle of the Hair Shampoo has  a price of $6.

Reports

Following are the reports where you can know the value of your stock using one of the two valuation methods:

  • Consumption Report
  • Value Report

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