Dead stock ratio
Dead stock ratio is the cost of stock counted as non-moving under the business's written threshold divided by total inventory at cost; it shows how much capital is tied up in goods that do not sell.
Also calledobsolete stock ratio, non-moving stock ratio, slow-moving stock share, aged stock ratio
Formula
Non-moving stock past the threshold at cost ÷ Total inventory at cost × 100- Threshold
- The business's written criterion: movement-based (days since last sale) or velocity-based (time to sell through at the current rate). For seasonal products, the counter resets when the season for that product begins.
- Non-moving stock at cost
- Stock at cost of the SKUs and locations past the threshold.
- Total inventory at cost
- The cost value of all stock on the same date.
Calculator
Enter your own figures and the result updates instantly. The defaults are the figures from the worked example below.
Result%13
Worked example
How to read it, and what good looks like
Dead stock does not show in averaged measures: inventory turnover blends fast and slow products together. The dead stock ratio is the one number that brings the distribution onto the management dashboard. Setting up ageing buckets and the order of clearance methods are covered in the dead stock and inventory ageing guide; this page is for the quick calculation.
In grocery, dead stock mostly builds up in one-off weekly-special lines and slow-moving non-food departments; in food the same problem shows as stock nearing its expiry date and can end in disposal. Globally, IHL Group put the cost of overstock to retail at USD 562 billion in 2023 (as cited in Pygmalios's 2026 report). The cost of dead stock is not only lost value; multiplying the ratio by the inventory carrying cost rate makes the annual cost visible.
The threshold and target come from the business's own data: the threshold by category shelf life and seasonality, the target by the trend of the ratio over past quarters. A ratio rising month on month means the problem is growing. Compare by category and supplier, because ageing usually concentrates in particular buying decisions. In Mindpera, Mind Stock flags non-moving stock against a defined day threshold and shows the value it ties up; Mind Send matches stores holding dead stock with stores selling fast and produces a transfer proposal.
Where it misleads
- If the counter for a seasonal product is not reset when its season begins, salep and hot chocolate bought for winter look dead in July and get marked down unnecessarily.
- Calculated on units, the ratio over-weights cheap items; decide on the share at cost.
- If store-to-store transfers count as "movement", goods that circulate without selling never look dead; under a movement-based definition only sales count.
- In stock pooled under weighted average cost, receipt dates are lost; age is calculated on a FIFO assumption, and the report says so.
Data you need
- Inventory at cost by SKU and location
- Last sale date and daily unit sales (for a velocity-based threshold)
- Receipt date or batch information
- Seasonal product flag, category and supplier
Mindpera products that calculate this KPI
Mind Stock
Stop treating stock accuracy as something that waits for a count and a month-end close. See movements in and out, expiry dates and profitability on one screen.
Mind Send
Make your shipments manageable. Depot-to-branch dispatch, branch-to-branch transfer and the initial allocation decision are produced together with the demand forecast.
Frequently asked questions
- How do you calculate dead stock ratio?
- Divide the cost of non-moving stock past the written threshold by total inventory at cost and multiply by 100. If ₺312,000 of ₺2,400,000 total stock is past the threshold, the ratio is 312,000 ÷ 2,400,000 × 100 = 13%. Calculate at cost, not in units. For seasonal products the non-movement counter resets when their season begins, and the threshold stays the same in every report.
- How do you reduce dead stock?
- Try store-to-store transfers first, because the goods can still sell at full price. Then come bundles and cross-selling, staged markdowns and, where agreed, return to the supplier, each with a time limit. The lasting fix is on the buying side: find which supplier and which buying decision the dead stock concentrates in, and correct the ordering rule.