Inventory Shrinkage Calculator

Inventory shrinkage is any gap between the inventory value recorded in your books and what a physical count actually finds on the shelf or in the warehouse — commonly caused by theft (external or internal), vendor short-shipments, damage, spoilage, or paperwork and scanning errors. This calculator measures the size of that gap in dollars and as a percentage of book value; it does not distinguish between these causes, so a high shrinkage rate is a prompt to investigate further, not a diagnosis.

Shrinkage Value is Book Inventory Value minus Physical Inventory Value, floored at zero so an inventory that counts higher than the books never registers as negative shrinkage. Shrinkage Rate then expresses that dollar figure as a percentage of Book Inventory Value — useful for judging how much of the stock you were carrying went missing. Note that this is a different ratio from the one the National Retail Federation publishes: NRF's National Retail Security Survey measures shrink as a percentage of total retail sales (1.6% in FY2022), which is what the Shrinkage as % of Revenue output computes, so use that output when benchmarking against published industry figures.

No — Annual Revenue only feeds the Shrinkage as % of Revenue output, a separate way of framing the same dollar loss against your total sales rather than your inventory value. The core Shrinkage Rate and Shrinkage Value figures come entirely from the Book Inventory Value and Physical Inventory Value you enter, so revenue has no effect on them at all.

Enter a Book Inventory Value and Physical Inventory Value from the same counting date, and an Annual Revenue figure covering the full year those counts sit inside. Shrinkage Rate and Shrinkage Value describe the gap at that single count, while Shrinkage as % of Revenue frames it against a year of sales — if you count more than once a year, add up the shrinkage from every count before comparing it to Annual Revenue or to published industry benchmarks.

Only in a limited, averaged sense — Shrinkage Per SKU simply divides your total Shrinkage Value by the Number of SKUs you enter, giving you an average dollar loss per product line rather than per-item detail. It can't tell you which specific SKUs are driving the loss; for that you'd need item-level cycle counts rather than one aggregate physical inventory figure.