The item that enters your warehouse first, will be taken first from your warehouse for sales.

It is not advised to use the FIFO inventory calculation method in combination with the „Inventory may have a negative value” option, as the negative inventory may mix up your calculations.

Example 1:

You purchase 1 product for a net price of 1000 USD. A bit later you purchase the same type of product for a net price of 1500 USD.

Your inventory value is 2500 USD (1*1000 USD + 1*1500 USD=2500 USD)

Applying the FIFO logic, you sell one product.

Key-Business will take the first product from your inventory first. When you sell the product, your inventory will have the 1500 USD product only.

At this moment, your inventory value is 1500 USD (1*1500 USD= 1500 USD)

Example 2:

Product name X.
You purchase: 10 pieces, with the unit price of 290 USD/piece
You purchase: 5 pieces, with the unit price of 350 USD/piece
Your inventory value: 4 650 USD
Calculation: / 10*290 USD + 5*350 USD=4 650 USD

You sell: 4 pieces, with the unit price of 500 USD/piece
The margin of your sale: 840 USD
Calculation: / 4 * 500 USD – 4*290 USD= 840 USD
Inventory value: 3 490 USD
Calculation: / 6*290 USD + 5*350 USD= 3 490 USD

You purchase: 6 pieces, with the unit price of 340 USD/piece
You sell: 12 pieces, with the unit price of 550 USD/piece
The margin of your sale: 2 770 USD
Calculation: / 12*550 USD-(6*290 USD+5*350 USD+1*340 USD)=2 770 USD
Inventory value: 1 700 USD
Calculation: / 5*340 USD=1700 USD