How you calculate your inventory shrinkage?

Question

Accepted Answer

Inventory shrinkage is calculated by comparing the recorded inventory levels with the actual inventory levels.

Record the inventory levels at the beginning and end of a period
Add the inventory received during the period
Subtract the inventory sold during the period
Compare the recorded inventory levels with the actual inventory levels
Calculate the difference as a percentage of the recorded inventory levels
Formula: (Recorded inventory - Actual inventory) / Recorded inventory * 100
Example: Recorded inventory = 1000, Actual inventory = 900, Shrinkage = (1000-900)/1000*100 = 10%

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