* Is High or Low Best:
Security Expense as a Percentage of Sales measures the company’s investment in securing its retail inventory. High security expenses may be a reaction to high theft rates in the past or may be an indicator of an overall security strategy that is not cost-efficient. While it is good to invest in the protection of physical inventory, companies are going to want to achieve low inventory shrinkage rates while also maintaining as low of a security expense as possible through technology and loss prevention training.
The amount of security-related expense (includes security cameras, security guards, other security measures, etc.) incurred by a company’s physical store locations divided by the total dollar amount of sales generated over the same period of time, as a percentage.
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