Inventory Shrinkage Calculator
Calculate inventory shrinkage and shrinkage percentage from recorded (book) inventory value and actual (counted) inventory value.
$
$
Result
Shrinkage
$2,500.00
Shrinkage %
5.00%
How to Use the Inventory Shrinkage Calculator
Enter your recorded (book) inventory value — what your records say you should have — and your actual (counted) inventory value from a physical count. The difference is your shrinkage: inventory that exists on paper but is missing in reality, typically due to theft, damage, spoilage, or record-keeping errors.
Shrinkage = Recorded Value − Actual Value
Shrinkage % = (Shrinkage / Recorded Value) × 100
Shrinkage % = (Shrinkage / Recorded Value) × 100
Example
Records show $50,000 of inventory, but a physical count finds only $47,500 on the shelves. That's $2,500 in shrinkage, or 5% of recorded inventory value.
Common Use Cases
- Measuring loss after a periodic or annual physical inventory count.
- Tracking shrinkage rate over time to spot theft, damage, or process problems.
- Benchmarking a store or warehouse's shrinkage rate against industry averages.
FAQs
- How is this different from the Inventory Turnover Calculator? Inventory turnover measures how quickly inventory sells — it's about sales velocity, calculated from cost of goods sold and average inventory value. Shrinkage measures inventory that is simply lost — to theft, damage, or record errors — regardless of how fast the remaining stock sells. They answer completely different questions.
- How is this different from the Inventory Carrying Cost Calculator? Carrying cost estimates what it costs to hold inventory over time — storage, insurance, obsolescence, and opportunity cost on the capital tied up. Shrinkage instead measures inventory that has physically disappeared from stock. Carrying cost is about the cost of keeping inventory; shrinkage is about inventory you no longer have at all.
- What's a typical shrinkage rate? Retail shrinkage rates commonly cited in industry surveys often fall around 1-2% of sales, though this varies significantly by industry, store type, and loss-prevention practices. Use your own historical shrinkage rate as the most relevant benchmark for your business.