How to use this calculator
- Enter or choose book (recorded) inventory.
- Enter or choose physical count.
- Enter or choose net sales for the period.
- The shrink as % of sales updates as you type. Use Copy result or Share to keep it.
Method
Shrinkage = Book inventory − Physical count; Shrink rate = Shrinkage ÷ Net sales × 100
- Book inventory
- what your records say you should have
- Physical count
- what the stock count found
- Net sales
- sales for the period since the last count
Worked example
- Shrinkage = 250,000 − 241,000 = 9,000.
- Shrink rate = 9,000 ÷ 600,000 × 100 = 1.5% of sales (3.6% of book inventory).
A $9,000 gap between book and counted stock on $600,000 of sales is a 1.5% shrink rate.
What the result means
Shrink comes from theft, damage, supplier short-shipping and recording errors. Break it down by department or SKU to find where it happens; a sudden change often points to a process or system issue.
Assumptions and limits
- Book and physical values use the same valuation basis.
- Sales cover the period since the previous count.
- A negative result (overage) usually means receiving or recording errors rather than a gain.
Questions
Why measure shrink against sales?
It is the standard retail convention, so figures are comparable between stores and with industry surveys.