How to calculate Shrinkage Rate

Formula

Shrinkage rate = (book inventory value − counted inventory value) ÷ book inventory value

SQL query

This example assumes: stock_counts(counted_at date, sku text, book_qty numeric, counted_qty numeric, unit_cost numeric). It is written in PostgreSQL syntax; date functions differ slightly in MySQL, BigQuery and SQLite, and your column names will differ from these.

SELECT counted_at,
       SUM(book_qty * unit_cost) AS book_value,
       SUM(counted_qty * unit_cost) AS counted_value,
       (SUM(book_qty * unit_cost) - SUM(counted_qty * unit_cost))
         / NULLIF(SUM(book_qty * unit_cost), 0) AS shrinkage_rate
FROM stock_counts
GROUP BY counted_at
ORDER BY counted_at;

Common mistakes that make Shrinkage Rate wrong

• Positive and negative differences net off at the total level; look at the gross loss by SKU as well.
• Goods received but not yet booked in look like overages that hide real shrinkage.
• Count timing matters: sales made during the count must be reflected in the book quantity.

Ask for Shrinkage Rate in plain English

Instead of writing the query yourself, you can type the question. SchemaChat turns it into SQL against your connected database or uploaded file, runs it, and shows the SQL and the figures it used so you can check the answer before you share it. It does not replace your judgement about the definition: check that the query matches the formula your business uses.

• What was our shrinkage rate at each stock count?
• Which SKUs had the largest negative count difference at the last count?