"Last In, First Out" (LIFO) is an inventory management method where the most recently added items are the first to be sold or used. This approach is commonly applied in accounting and inventory systems, particularly for businesses that deal with perishable goods or items that may become obsolete quickly. By using LIFO, companies can better match their current costs with revenues, which can be beneficial for tax purposes. In a LIFO system, if a company has a stock of products, the last items added to the inventory are the first ones to be removed. This can affect financial statements, as it may lead to lower profits during times of rising prices. LIFO is one of several inventory valuation methods, alongside others like First In, First Out (FIFO) and Weighted Average Cost.