{"ok":true,"canonical_url":"https://dealroom.so/glossary/inventory-valuation","api_url":"https://dealroom.so/api/public/glossary/inventory-valuation","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"inventory-valuation","term":"Inventory valuation","group":"Reading the business","definition":"The method used to assign a monetary value to a business's inventory. This directly impacts the balance sheet and the cost of goods sold, affecting the business's profitability and overall value.","what_it_means":"Understand how the seller values inventory (e.g., FIFO, LIFO, weighted average). During due diligence, reconcile physical inventory counts with financial records. Ensure the inventory isn't obsolete or unsellable, as overvalued inventory inflates assets and profits, potentially leading you to overpay.","url":"https://dealroom.so/glossary/inventory-valuation","official_sources":[],"related":[{"slug":"inventory","term":"Inventory","url":"https://dealroom.so/glossary/inventory"},{"slug":"balance-sheet","term":"Balance Sheet","url":"https://dealroom.so/glossary/balance-sheet"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"asset-purchase","term":"Asset purchase","url":"https://dealroom.so/glossary/asset-purchase"}],"related_questions":[{"question":"When is an independent business valuation required for a partner buyout?","url":"https://dealroom.so/sba-7a/questions/when-is-an-independent-business-valuation-required-for-a-partner-buyout"},{"question":"Can an SBA 7(a) loan cover inventory purchases for my business?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-cover-inventory-purchases-for-my-business"},{"question":"What valuation methods are acceptable for assessing goodwill in an SBA acquisition?","url":"https://dealroom.so/sba-7a/questions/what-valuation-methods-are-acceptable-for-assessing-goodwill-in-an-sba-acquisition"},{"question":"What if the business valuation is insufficient to support the purchase price?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-valuation-is-insufficient-to-support-the-purchase-price"},{"question":"What is the importance of a professional business valuation for an acquisition?","url":"https://dealroom.so/sba-7a/questions/what-is-the-importance-of-a-professional-business-valuation-for-an-acquisition"},{"question":"Can an SBA 7(a) loan fund initial inventory for a new business?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-fund-initial-inventory-for-a-new-business"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Inventory valuation","url":"https://dealroom.so/glossary/inventory-valuation","source_type":"DealRoom Data"}}