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Formul Docs

Inventory Valuation

Goal

Section titled “Goal”

Understand the current financial value of inventory using Weighted Average Cost (WAC).

Before You Start

Section titled “Before You Start”
  • Receipt and production transactions are posted.
  • You understand quantity and unit-of-measure context for tracked items.

Steps

Section titled “Steps”

  1. Navigate to Reports > Valuation.

  2. Review item-level rows.

  3. Validate these columns:

    • Quantity
    • Unit Cost (WAC)
    • Total Value

    Valuation Report

  4. Investigate outliers by drilling into related item ledger activity.

Expected Result in Formul

Section titled “Expected Result in Formul”
  • Valuation aligns with recent receipts, production outputs, and shipments.
  • You can explain material value shifts over time.

Why This Report Matters

Section titled “Why This Report Matters”
  • Valuation explains how much working capital is tied up in inventory right now.
  • Changes in Unit Cost (WAC) signal purchasing-price shifts or production-mix effects.
  • If valuation is inaccurate, gross margin and replenishment decisions are usually wrong.

If Something Looks Wrong

Section titled “If Something Looks Wrong”
  • Verify unit prices on recent receipts.
  • Verify production postings for consumed and output quantities.
  • Verify no missing transactions for the period under review.

Next Step

Section titled “Next Step”

Run batch genealogy checks in Traceability.