Retail Shrink & Write-offs Calculator

How the retail shrink & write-offs calculator works

Signed count variance = recorded cost − counted cost. Positive variance is modeled shortage cost. A counted surplus remains visible as a negative variance, but does not offset the separately entered write-off exposure.

Total modeled exposure adds positive shortage cost and additional separate write-offs. Do not add losses already present in the book/count gap, or losses already recognized in the figures, a second time. The shortage percentage uses recorded inventory cost as its denominator.

Sales-equivalent = exposure ÷ contribution margin expressed as a decimal. Zero contribution gives an undefined result. This is an arithmetic contribution scenario, not a forecast of recoverable sales, an insurance amount, a tax deduction or a proposed accounting adjustment.

Worked example

Recorded stock cost of 100,000 and counted stock cost of 96,000 create a 4,000 shortage, or 4% of book cost. Adding 2,000 of separate losses gives 6,000 exposure. At 40% contribution, its sales-equivalent is 15,000. If counted stock falls to 90,000, exposure becomes 12,000.

Sources and assumptions

The source material explains the underlying calculation or pricing structure. Entered prices, costs, schedules and scenario choices are your assumptions; this tool does not obtain supplier quotes or predict actual results.

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