Inventory Carrying Cost Calculator

✖Total Carrying Cost refers to the total expenses associated with holding and storing inventory or assets over a certain period.ⓘ Total Carrying Cost [TCC]			+10% -10%
✖Total Inventory Value refers to the total monetary worth of all the inventory items held by a business at a given point in time.ⓘ Total Inventory Value [TIV]			+10% -10%

✖Inventory Carrying Cost refers to the expenses associated with holding and storing inventory over a certain period of time.ⓘ Inventory Carrying Cost [ICC]

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Formula

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Inventory Carrying Cost

Formula

`"ICC" = ("TCC"/"TIV")*100`

Example

`"153.8462"=("300000"/"195000")*100`

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Inventory Carrying Cost Solution

STEP 0: Pre-Calculation Summary

Formula Used

Inventory Carrying Cost = (Total Carrying Cost/Total Inventory Value)*100
ICC = (TCC/TIV)*100
This formula uses 3 Variables

Variables Used

Inventory Carrying Cost - Inventory Carrying Cost refers to the expenses associated with holding and storing inventory over a certain period of time.
Total Carrying Cost - Total Carrying Cost refers to the total expenses associated with holding and storing inventory or assets over a certain period.
Total Inventory Value - Total Inventory Value refers to the total monetary worth of all the inventory items held by a business at a given point in time.

STEP 1: Convert Input(s) to Base Unit

Total Carrying Cost: 300000 --> No Conversion Required
Total Inventory Value: 195000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

ICC = (TCC/TIV)*100 --> (300000/195000)*100

Evaluating ... ...

ICC = 153.846153846154

STEP 3: Convert Result to Output's Unit

153.846153846154 --> No Conversion Required

FINAL ANSWER

153.846153846154 ≈ 153.8462 <-- Inventory Carrying Cost

(Calculation completed in 00.004 seconds)

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Created by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

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Satyawati College (DU), New Delhi

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< 18 Capital Budgeting Calculators

Overall Cost of Capital

Go Overall Cost of Capital = (Market Value of the Firm’s Equity)/(Market Value of the Firm’s Equity+Market Value of the Firm’s Debt)*Required Rate of Return+(Market Value of the Firm’s Debt)/(Market Value of the Firm’s Equity+Market Value of the Firm’s Debt)*Cost of Debt*(1-Tax Rate)

Discounted Payback Period

Go Discounted Payback Period = ln(1/(1-((Initial Investment*Discount Rate)/Periodic Cash Flow)))/ln(1+Discount Rate)

Net Present Value (NPV) for even cash flow

Go Net Present Value (NPV) = Expected Cash Flow*((1-(1+Rate of Return)^-Number of Periods)/Rate of Return)-Initial Investment

Capital Asset Pricing Model

Go Expected Return on Investment = Risk Free Rate+Beta on Investment*(Expected Return on Market Portfolio-Risk Free Rate)

Double Declining Balance Method

Go Depreciation Expense = (((Purchase Cost-Salvage Value)/Useful Life Assumption)*2)*Beginning PP&E Book Value

Modified Internal Rate of Return

Go Modified Internal Rate of Return = 3*((Present Value/Cash Outlay)^(1/Number of Years)*(1+Interest)-1)

Cost of Retained Earnings

Go Cost of Retained Earnings = (Dividend/Current Stock Price)+Growth Rate

After-Tax Cost of Debt

Go After Tax Cost of Debt = (Risk Free Rate+Credit Spread)*(1-Tax Rate)

Beginning Inventory

Go Beginning Inventory = Cost of Goods Sold-Purchases+Ending Inventory

Terminal Value using Perpetuity Method

Go Terminal Value = Free Cash Flow/(Discount Rate-Growth Rate)

Trade Discount

Go Trade Discount = multi(List Price,Trade Discount Rate)

Expected Monetary Value

Go Expected Monetary Value = multi(Probability,Impact)

Accounting Rate of Return

Go Accounting Rate of Return = (Average Annual Profit/Initial Investment)*100

Inventory Carrying Cost

Go Inventory Carrying Cost = (Total Carrying Cost/Total Inventory Value)*100

Certainty Equivalent Cashflow

Go Certainty Equivalent Cashflow = Expected Cash Flow/(1+Risk Premium)

Payback Period

Go Payback Period = Initial Investment/Cashflow per Period

Terminal Value using Exit Multiple Method

Go Terminal Value = EBITDA at Last Period*Exit Multiple

Cost of Debt

Go Cost of Debt = Interest Expense*(1-Tax Rate)

Inventory Carrying Cost Formula

Inventory Carrying Cost = (Total Carrying Cost/Total Inventory Value)*100
ICC = (TCC/TIV)*100

What is Inventory Carrying Cost?

Inventory carrying cost, often referred to simply as carrying cost, encompasses all the expenses associated with holding and managing inventory within a business. It includes various overhead costs incurred throughout the inventory's lifecycle, from procurement to storage and sale. These costs typically encompass warehousing expenses, such as rent, utilities, insurance, and maintenance, as well as the opportunity cost of tying up capital in inventory rather than investing it elsewhere. Moreover, inventory carrying cost may also encompass depreciation, obsolescence, shrinkage, and the financial risks associated with excess or obsolete inventory. Businesses carefully monitor and manage their inventory carrying costs as part of their overall inventory management strategy to optimize efficiency, profitability, and cash flow.

How to Calculate Inventory Carrying Cost?

Inventory Carrying Cost calculator uses Inventory Carrying Cost = (Total Carrying Cost/Total Inventory Value)*100 to calculate the Inventory Carrying Cost, The Inventory Carrying Cost is an accounting term that identifies all business expenses related to holding and storing unsold goods. Inventory Carrying Cost is denoted by ICC symbol.

How to calculate Inventory Carrying Cost using this online calculator? To use this online calculator for Inventory Carrying Cost, enter Total Carrying Cost (TCC) & Total Inventory Value (TIV) and hit the calculate button. Here is how the Inventory Carrying Cost calculation can be explained with given input values -> 153.8462 = (300000/195000)*100.

FAQ

What is Inventory Carrying Cost?

The Inventory Carrying Cost is an accounting term that identifies all business expenses related to holding and storing unsold goods and is represented as ICC = (TCC/TIV)*100 or Inventory Carrying Cost = (Total Carrying Cost/Total Inventory Value)*100. Total Carrying Cost refers to the total expenses associated with holding and storing inventory or assets over a certain period & Total Inventory Value refers to the total monetary worth of all the inventory items held by a business at a given point in time.

How to calculate Inventory Carrying Cost?

The Inventory Carrying Cost is an accounting term that identifies all business expenses related to holding and storing unsold goods is calculated using Inventory Carrying Cost = (Total Carrying Cost/Total Inventory Value)*100. To calculate Inventory Carrying Cost, you need Total Carrying Cost (TCC) & Total Inventory Value (TIV). With our tool, you need to enter the respective value for Total Carrying Cost & Total Inventory Value and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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