Inventory Shrinkage Solution

STEP 0: Pre-Calculation Summary
Formula Used
Inventory Shrinkage = ((Recorded Inventory-Actual Inventory)/Recorded Inventory)*100
IS = ((RI-I)/RI)*100
This formula uses 3 Variables
Variables Used
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.
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.
Actual Inventory - Actual Inventory refers to the stock in hand a business has in real.
STEP 1: Convert Input(s) to Base Unit
Recorded Inventory: 500 --> No Conversion Required
Actual Inventory: 375 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
IS = ((RI-I)/RI)*100 --> ((500-375)/500)*100
Evaluating ... ...
IS = 25
STEP 3: Convert Result to Output's Unit
25 --> No Conversion Required
FINAL ANSWER
25 <-- Inventory Shrinkage
(Calculation completed in 00.004 seconds)
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Satyawati College (DU), New Delhi
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22 Business Calculators

Weighted Average Cost of Capital
Go Weighted average cost of capital = ((Market value of the firm’s equity/Firm Value)*Cost of Equity)+(((Market Value of the Firm’s Debt/Firm Value)*Cost of Debt)*(1-Corporate Tax Rate))
Total Inventory Cost
Go Total Inventory Cost = Carrying cost per unit per year*(Quantity of Each Order/2)+Fixed cost per order*(Demand in units per year/Quantity of Each Order)
Acid Test Ratio
Go Acid Test Ratio = (Cash+Accounts Receivable+Short Term Investments)/Current Liabilities
Economic Order Quantity
Go Economic Order Quantity = ((2*Fixed cost per order*Demand in units per year)/Carrying cost per unit per year)*(1/2)
Return on Capital Employed
Go Return on capital employed = (Earnings Before Interest and Taxes/(Total Assets-Current Liabilities))*100
Diluted Earnings per Share
Go Diluted Earnings per Share = Net Income/(Average Shares+Other Convertible Securities)
Inventory Shrinkage
Go Inventory Shrinkage = ((Recorded Inventory-Actual Inventory)/Recorded Inventory)*100
Modified Duration
Go Modified Duration = Macaulay Duration/(1+Yield to Maturity (YTM)/Coupon Periods)
Target Inventory Investment
Go Target Inventory Investment = Projected Annual Cost of Goods Sold from Stock Sales/Target Inventory Turnover
Beginning Inventory
Go Beginning Inventory = Cost of Goods Sold-Purchases+Ending Inventory
Retention Ratio
Go Retention Ratio = (Net Income-Dividend)/Net Income
Contribution Margin per Unit
Go Contribution Margin per Unit = Sales Price per Unit-Variable Cost per Unit
Operating Expense Ratio
Go Operating Expense Ratio = (Operating Expense/Gross Operating Income)*100
Break-Even Point
Go Break Even Point = Fixed Costs/Contribution Margin per Unit
Estimated Earnings
Go Estimated Earnings = Forecasted Sales-Forecasted Expense
Debt Coverage Ratio
Go Debt Coverage Ratio = Net Operating Income/Debt Service
Dividends Per Share
Go Dividends Per Share = Total Dividends/Number of Shares
Solvency Ratio
Go Solvency Ratio = (Shareholders Fund*100)/Total Assets
Estimate at completion
Go Estimate at Completion = Actual Cost+Bottom up ETC
Percentage off
Go Percentage Off = 1-(Selling Price/Original Price)
Preferred Stock
Go Preferred Stock = Dividend/Discount Rate
Days in Inventory
Go Days in Inventory = 365/Inventory Turnover

Inventory Shrinkage Formula

Inventory Shrinkage = ((Recorded Inventory-Actual Inventory)/Recorded Inventory)*100
IS = ((RI-I)/RI)*100

What is Inventory Shrinkage?

Inventory Shrinkage occurs when the number of products in stock are fewer than those recorded on the inventory list. The discrepancy may occur due to clerical errors, goods being damaged or lost, or theft from the point of purchase from a supplier to the point of sale.

How to Calculate Inventory Shrinkage?

Inventory Shrinkage calculator uses Inventory Shrinkage = ((Recorded Inventory-Actual Inventory)/Recorded Inventory)*100 to calculate 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 calculate Inventory Shrinkage using this online calculator? To use this online calculator for Inventory Shrinkage, enter Recorded Inventory (RI) & Actual Inventory (I) and hit the calculate button. Here is how the Inventory Shrinkage calculation can be explained with given input values -> 25 = ((500-375)/500)*100.

FAQ

What is 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) and is represented as IS = ((RI-I)/RI)*100 or Inventory Shrinkage = ((Recorded Inventory-Actual Inventory)/Recorded Inventory)*100. 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 & Actual Inventory refers to the stock in hand a business has in real.
How to calculate 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) is calculated using Inventory Shrinkage = ((Recorded Inventory-Actual Inventory)/Recorded Inventory)*100. To calculate Inventory Shrinkage, you need Recorded Inventory (RI) & Actual Inventory (I). With our tool, you need to enter the respective value for Recorded Inventory & Actual Inventory and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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