How is the value of existing inventory determined?
Opinions expressed by Entrepreneur contributors are their own.Inventory is generally valued at cost with a discount for the aging of stock. What discount ?
It really depends on the industry and the type of stock. For example a clothing store that has last season's stock will generally have to write that down massively, but a hardware store with electrical fittings will be able to charge full cost in most cases.
Check the age of all inventory and work out what value it has based on the older it is the less it is worth. Now, if you find they have several years of future supply, then much of that can be written down.
All the Best,