How to Calculate Dead Stock Inventory (With a Worked Example)

“Dead stock” gets thrown around loosely, but it's worth calculating precisely — because the number tells you how much cash is actually at stake, not just how many products are affected.

The core formula

For any given SKU, the cash tied up in dead stock is simply:

Cash tied up = Quantity on hand × Unit cost

That's the amount you paid to acquire the units still sitting unsold. It's the number that matters most, because it's the cash you can't redeploy into inventory that actually turns.

Worked example

Say you have a SKU with the following numbers:

Quantity on hand: 40 units
Unit cost: $18
Retail price: $40
Units sold in the last 90 days: 0
Days since last sale: 210

Cash tied up = 40 × $18 = $720. That's the dollar figure at risk on this SKU alone. With zero units sold in 90 days and 210 days since the last sale, this is a strong dead-stock candidate — the question becomes what to do about the $720, not whether it qualifies.

Why quantity-weighted totals matter more than SKU counts

“12% of our SKUs are dead stock” is a weaker signal than “dead stock accounts for $38,000 of tied-up cash.” A catalog can have a large number of low-value dead SKUs and a small number that account for most of the actual dollars — sorting by cash tied up, not SKU count, is what surfaces the ones worth acting on first.

Doing this across a full catalog

Try this calculation on your own SKU with the free Dead Stock Calculator. The math is simple for one SKU; it gets tedious fast across a few hundred or a few thousand. See our guide on identifying dead stock inventory for the broader process, or running a full inventory audit to see how this fits into a repeatable workflow. Inventory Assassin runs this calculation automatically across every SKU in an uploaded catalog and ranks the results by cash at risk.