The retail inventory method requires a company to state inventory on the year-end balance sheet at its retail value.

Name: The retail inventory method requires a company to state inventory on the year-end balance sheet at its retail value.
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The retail inventory method requires a company to value inventory at cost or market value, not at its retail value. It estimates the ending inventory balance using a cost-to-retail price ratio.

The Retail Inventory Method Requires a Company to State Inventory