Inventory
Inventory value at cost
What the stock on your shelf cost you, not what you hope to sell it for.
Formula
Σ units on hand × effective unit cost
Inventory value at cost is units on hand times the unit cost effective today. It is the money currently tied up in stock, which is what a bank or an investor is asking about.
Valuing it at retail price flatters the number and answers a question nobody asked.
Stock with no unit cost should be shown as unknown rather than as zero, otherwise the total quietly shrinks in a way that looks like good news.
Related terms