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Inventory Shrinkage Formula

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Inventory Shrinkage is an accounting term that describes the difference between inventory that is recorded and what is actually in physical inventory, indicating a loss in inventory. Check FAQs

IS = (\frac{RI - I}{RI}) \cdot 100

IS - Inventory Shrinkage?RI - Recorded Inventory?I - Actual Inventory?

Inventory Shrinkage Example

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Here is how the Inventory Shrinkage equation looks like with Values.

Here is how the Inventory Shrinkage equation looks like with Units.

Here is how the Inventory Shrinkage equation looks like.

25 = (\frac{500 - 375}{500}) \cdot 100

25 = (\frac{500 - 375}{500}) \cdot 100

25 = (\frac{500 - 375}{500}) \cdot 100

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Inventory Shrinkage Solution

Follow our step by step solution on how to calculate Inventory Shrinkage?

FIRST Step Consider the formula

IS = (\frac{RI - I}{RI}) \cdot 100

Next Step Substitute values of Variables

∴

IS = (\frac{500 - 375}{500}) \cdot 100

Next Step Prepare to Evaluate

∴

IS = (\frac{500 - 375}{500}) \cdot 100

LAST Step Evaluate

∴

IS = 25

Inventory Shrinkage Formula Elements

Variables

Inventory Shrinkage

Inventory Shrinkage is an accounting term that describes the difference between inventory that is recorded and what is actually in physical inventory, indicating a loss in inventory.

Symbol: IS

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Inventory Shrinkage

Recorded Inventory

Recorded Inventory contains data about the items a company has in stock, such as the amount of inventory on hand, what's been sold and reordered, and where it's stored.

Symbol: RI

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Recorded Inventory

Actual Inventory

Actual Inventory refers to the stock in hand a business has in real.

Symbol: I

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Actual Inventory

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How to Evaluate Inventory Shrinkage?

Inventory Shrinkage evaluator uses Inventory Shrinkage = ((Recorded Inventory-Actual Inventory)/Recorded Inventory)*100 to evaluate the Inventory Shrinkage, The Inventory Shrinkage formula is defined as the difference between the amount or value of inventory recorded in a business's accounting records (book inventory/value) and the amount or value actually in stock (actual inventory/value). Inventory Shrinkage is denoted by IS symbol.

How to evaluate Inventory Shrinkage using this online evaluator? To use this online evaluator for Inventory Shrinkage, enter Recorded Inventory (RI) & Actual Inventory (I) and hit the calculate button.

FAQs on Inventory Shrinkage

What is the formula to find Inventory Shrinkage?

The formula of Inventory Shrinkage is expressed as Inventory Shrinkage = ((Recorded Inventory-Actual Inventory)/Recorded Inventory)*100. Here is an example- 25 = ((500-375)/500)*100.

How to calculate Inventory Shrinkage?

With Recorded Inventory (RI) & Actual Inventory (I) we can find Inventory Shrinkage using the formula - Inventory Shrinkage = ((Recorded Inventory-Actual Inventory)/Recorded Inventory)*100.

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Inventory Shrinkage Formula

Inventory Shrinkage Example

Inventory Shrinkage Solution

Inventory Shrinkage Formula Elements

Other formulas in Business category

How to Evaluate Inventory Shrinkage?

FAQs on Inventory Shrinkage

Variable Name