Calculate the shrinkage percentage after determining the original size and the end size. Subtract the final size from the original size to find the amount of the shrinkage. For example, if a felt square shrinks from 8 square inches to 6 square inches, subtract 6 from 8, resulting in 2 square inches of shrinkage. However, the accountant observed that the business has $37,000 worth of finished products. Help the top management of the business to determine the overall shrinkage and the rate of shrinkage in the inventory. Solution: Use the given data for the calculation of shrinkage value. Calculating inventory shrinkage is simpler than the physical count. Subtract the value of the inventory from what's in the books, which in this example gives you a result of $8,000. Divide $8,000 by the book value of $245,000 to get .032, which equals a 3.2% inventory shrinkage rate.