"First In, First Out" (FIFO) is an inventory management method where the oldest stock is sold or used first. This approach helps businesses manage perishable goods, like food products, ensuring that items do not expire before they are sold. FIFO is commonly used in industries such as grocery stores and restaurants. In accounting, FIFO can also refer to how assets are valued. When calculating profits, the costs of the oldest inventory are matched against current sales. This method can affect financial statements and tax liabilities, making it important for businesses to choose the right inventory valuation method for their needs.