Choose the correct basis
Enter annual cost of goods sold, not sales revenue. Enter shrinkage as a percentage of that annual cost. If your business measures loss against stock held or retail selling value, convert the figures before using this tool.
Interpret the result carefully
Estimated loss equals annual cost of goods sold multiplied by the loss rate. Additional revenue needed equals that loss divided by gross margin. The calculation assumes additional sales earn the stated margin before other operating costs; it is not a claim that software eliminates the loss.