Inventory Value

Definition:
Inventory Value is the total dollar value of all products you currently have On Hand, based on their default Purchase Unit. It tells you how much money is tied up in your bar or restaurant’s inventory at a given time.

Formula:
Inventory Value = Σ (On Hand Quantity × Unit Cost) for all products

In Context:
Inventory Value is essential for calculating Cost of Goods Sold (COGS), assessing cash flow, and identifying opportunities to reduce overstock. In Spec, your Inventory Value is calculated automatically every time you complete a Stock Count, helping you track changes week to week and make smarter purchasing decisions.

Spec also lets you break this number down a number of ways (e.g. product family, area, vendor, etc.) so you can spot imbalances or trends over time.

Example:
If you have:

• 10 bottles of vodka @ $12 each = $120

• 5 bottles of gin @ $18 each = $90
  Your Inventory Value = $210

Pro Tip:
If your Inventory Value keeps rising while sales stay flat, you’re probably overordering or holding too much Dead Stock. Set Par Levels and review Reorder Points regularly to stay lean.

Related Terms:

• On Hand

• Stock Count

• Par Level

• Cost of Goods Sold (COGS)

• Dead Stock