How to Calculate Retail Shrinkage in Excel (2024)

FAQs

How to find shrinkage formula in Excel? ›

You can calculate retail shrinkage in Excel by dividing the value of goods lost to shrinkage by the total value of goods that are supposed to be in the inventory.

To calculate shrinkage in a retail store, you would look at the book inventory, which represents the inventory received and should be present in the store, and then subtract the actual amount of inventory, which is the amount of goods that are physically in the store.

The shrinkage calculation formula is (R before – R after) / R before * 100%.

If the company conducts stock inventory and finds the stock on hand to be $95,000, the amount of stock shrinkage is $5,000 ($100,000 – $95,000). The shrinkage percentage is 5% [ ($5,000/100,000) x 100].

Calculating retail shrinkage is fairly straightforward: take the optimal income you could make from retail merchandise, and subtract the actual income realized from that merchandise. While retail shrinkage is often measured in terms of total dollars lost it's, again, better expressed as a percentage of company sales.

Subtract the final size from the original size to find the amount of the shrinkage. Divide the amount of shrinkage by the original size to find the shrinkage rate. Multiply the shrinkage rate by 100 to find the shrinkage as a percentage.

An acceptable level of inventory shrinkage is less than 1%.

Retail markdown is calculated by subtracting the original retail price from the discounted price and then dividing the result by the original retail price. The result is expressed as a percentage.

Shrink is the industry term for inventory loss often attributed to theft, damage, or errors. Once simply considered a cost of doing business, shrink resulted in retail profit losses exceeding a staggering $100 billion in 2022.

To calculate the shrink percentage, subtract the final size from the original size, divide by the original size, then multiply by 100.

How do you calculate total shrink? ›

Calculating Total Shrink

Some grain buyers use drying tables which include moisture shrink and a constant handling loss, usually 0.5% of the initial weight of the grain. Using this method, the formula for calculating total shrink is: Total Shrink = (total moisture shrink) plus (handling loss).

Shrinkage is the value used to determine the total required staffing levels necessary to meet your business goals. In other words, it's the amount of “over-scheduling” you must perform in order to have the right number of agents working at any given time of the day.

To do this, just divide the value of unexplained losses by the total value of sales, then multiply the result by 100 to obtain a percentage.

The 'shrinkage formula' (also known as 'shrinkage calculation') is as follows: Shrinkage (%) = (Total Hours of External Shrinkage + Total Hours of Internal Shrinkage ) ÷ Total Hours Available × 100. Note, this is the shrinkage formula that can be used in Excel.

However, experts believe an ideal inventory shrinkage rate should be between 1 and 2 percent. Although, it is wise to make sure you record as little inventory shrinkage rate as possible.

Shrink Percentage Formula

To calculate the shrink percentage, subtract the final size from the original size, divide by the original size, then multiply by 100.

Suppose a Fabric cut piece length and width was 50 and 50.

After wash length become 48 cm, and width 48.5 cm: so here we go the calculation below: Fabric Shrinkage Calculation Formula: Shrinkage percentage = ((Before wash Measurement – After wash measurement) / Before wash measurement) x 100.