Calculation of Stock Shrinkage% and Damaged%


After you do a stocktake when you do your financial figures, you will need the following four numbers.

1) The value of your stock that your computer thinks that it had at the end of the financial year. If your point of sale is up to date, print out a report of your stock valuation before starting the stocktake. If you do not trust the figure in your point of sale software, then you can, or your accountant can give you an estimate. This is the (Perpetual stock value).

2) This comes out of your stocktake and is the value of your stock you have at the end of this financial year. Your point of sale software will have this figure once you enter in the stocktake figure in the stock valuation report. (Physically Counted Inventory Value)

3) What is the total sales of your shop less the non-stock items, e.g. if you sell touch gift cards, these are not stock items so take them off your overall sales figure.  Your total report should be able to give you this figure which is your (Sales of stock product)

4) Value of the damaged goods you counted. (Damaged stock value)

Now please do the following calculation.

Shrinkage% = ((Perpetual stock value)-(Physically Counted Inventory Value))/(Sales of stock product) x 100%

A typical figure here is about 1.4%, but it does vary a lot. I have seen estimates between 0.1% and 6%. 

Now what you may also want to look at is your damaged goods, these have a different story and it can be an exciting story to tell.

Damaged% = (Damaged stock value)/(Sales of stock product) x 100%

Once you get these figures, please let me know as I am interested in this sort of stuff.


Add new comment

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.
CAPTCHA This question is for testing whether or not you are a human visitor and to prevent automated spam submissions. Image CAPTCHA
Enter the characters shown in the image.