ABSTRACT The overall objectives of this project work is to evaluate the effect of inventory valuation methods on Corporate Performance and Company Income Tax Payable by business enterprises and the extent to which the effect can be minimized or discover a method that will increase profitability by coming up with a uniform, consistent and more realistic method, A method which will portray a true and fair view of the financial statement of an organization. Also highlighted were the problems hindering the adoption of universal and more realistic inventory valuation. This research work is basically divided into five chapters with each chapter being subdivided into component parts. In the course of caring out the research work, responses to the questions in the questionnaire were analyzed and interpreted. Furthermore, a test of the hypothesis was carried out using regression analysis. The outcome of the research support the assertion that inventory valuation methods have varying significant impact on the performance (profitability) of business enterprises and company income tax payable. The impact differs in accordance with the difference economic situation prevalent at a particular point in time. Consequent upon the findings, the researcher strongly recommends the use of the Average price method of valuing inventory since it does not give rise to unrealized profit, and tends to smoothen price fluctuations, thus making input cost of products more realistic. Therefore, the average price method could be more realistic in the face of modern economic trends. As a result, the researcher calls upon the Accountancy Professional bodies and Accounting regulatory bodies to critically examine the issue of using the average price method as the acceptable stock valuation method.