Calculating inventory value

Your inventory value is the total cost price of the items you have on the shelf right now. Shoporama automatically calculates it from the cost prices you have registered, so you can easily keep track of how much capital is tied up in inventory and use it in your accounting.

When you stock items, you can enter a cost price (the purchase price excluding VAT). Shoporama automatically retrieves the cost price set for the product if you don't enter one yourself. The better your cost prices are filled in, the more accurate the stock value will be.

Does Shoporama use FIFO or average price?

Shoporama uses weighted average price, not FIFO. When you have items in stock that are listed at different cost prices, the value is calculated based on an average weighted by quantity. See example further down.

Is the inventory value including or excluding VAT?

Inventory value is always calculated excluding VAT. It is the cost price excluding VAT that is included in the calculation.

What about items that are stocked without cost price?

They are not included in the inventory value. If you find that your inventory value seems too low, it's often due to missing cost prices. See Stock value without cost price for how to correct this.

I just added items to stock, but the value hasn't changed yet

The total stock value you see on the front page of the admin is updated overnight. What you put in stock today will count from tomorrow. This is done to avoid unnecessary server load during the day to keep your shop running fast.

How is the value calculated when I have changed the cost price along the way?

Shoporama takes an average weighted by quantity.

Example: You've stocked 10 items at $80 per item and then 5 items at $70 per item, for a total of $800 + $350 = $1,150. The average price is (10 × 80 + 5 × 70) / 15 = $75. Shoporama therefore sets the inventory value to 15 × 75 = $1,125.

How are products with variants counted?

Inventory is managed per variant, but the inventory value is calculated at the product level. All variants of the same product are added together and included in the total value of the product. See Synchronizing stock with variants for more on inventory management per variant.

Do bundles count towards the inventory value?

Bundles do not have their own inventory value when using the recommended shared inventory setup. The value is on the underlying products, so there is no double counting. Read more in the article about bundles.

What happens when I credit an order?

When you create a credit note, you can choose whether to put the items back in stock. If you do, the inventory will increase again and the items will be counted in the inventory value at the cost price they had when they were sold.

Do deleted products count?

No, they don't. Deleted products are not included in the inventory value, even if they still have inventory records in the system.

Can the inventory value become negative?

No, it can't. If a product should have a negative value (e.g. because more products have been sold than were in stock), its value is counted as 0 in the calculation, so the total stock value will never be negative.

Where do I see the total stock value?

You can find the number under Stock in admin, where it is displayed at the top of the page: "Your stock is worth X DKK ex. VAT in cost price". Remember that the figure is updated at night.

If you have any questions about the stock value, you are welcome to contact us at support@shoporama.dk.