Use of the retail inventory method requires taking a physical count of inventory.

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The retail inventory method does not require taking a physical count of inventory. It is a formula-based method that estimates the value of inventory by using the ratio of cost-to-retail price multiplied by the current retail price of the inventory. This method is commonly used in retail businesses to track inventory levels and evaluate the cost of goods sold.

Use of the Retail Inventory Method Requires Taking a Physical