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    Retail Math Formulas

    Uploaded by

    fran
    The document defines several retail math calculations used to analyze inventory and sales performance. It provides formulas to calculate average inventory, contribution margin, gross margin, gross margin return on investment, initial markup percentage, inventory turnover, maintained markup, margin percentage, markup amount, markdowns, net sales, open to buy, percentage increases or decreases, cost of goods plus markup equals retail price, reductions, sales per square foot, shrinkage, sell-through percentage, stock turn, stock-to-sales, cost of goods sold, margin percentage, and markdown percentage. It also defines key terms like markup, turnover, and average stock.

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    Retail Math Formulas

    Uploaded by

    fran
    6K views2 pages
    The document defines several retail math calculations used to analyze inventory and sales performance. It provides formulas to calculate average inventory, contribution margin, gross margin, gross margin return on investment, initial markup percentage, inventory turnover, maintained markup, margin percentage, markup amount, markdowns, net sales, open to buy, percentage increases or decreases, cost of goods plus markup equals retail price, reductions, sales per square foot, shrinkage, sell-through percentage, stock turn, stock-to-sales, cost of goods sold, margin percentage, and markdown percentage. It also defines key terms like markup, turnover, and average stock.

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    retail math formulas for retail merchandising, buying or wholesale

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    retail math formulas

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    The document defines several retail math calculations used to analyze inventory and sales performance. It provides formulas to calculate average inventory, contribution margin, gross margin, gross margin return on investment, initial markup percentage, inventory turnover, maintained markup, margin percentage, markup amount, markdowns, net sales, open to buy, percentage increases or decreases, cost of goods plus markup equals retail price, reductions, sales per square foot, shrinkage, sell-through percentage, stock turn, stock-to-sales, cost of goods sold, margin percentage, and markdown percentage. It also defines key terms like markup, turnover, and average stock.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    6K views2 pages

    Retail Math Formulas

    Uploaded by

    fran
    The document defines several retail math calculations used to analyze inventory and sales performance. It provides formulas to calculate average inventory, contribution margin, gross margin, gross margin return on investment, initial markup percentage, inventory turnover, maintained markup, margin percentage, markup amount, markdowns, net sales, open to buy, percentage increases or decreases, cost of goods plus markup equals retail price, reductions, sales per square foot, shrinkage, sell-through percentage, stock turn, stock-to-sales, cost of goods sold, margin percentage, and markdown percentage. It also defines key terms like markup, turnover, and average stock.

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    Average Inventory - The average inventory retail math calculation compares the inventory at one time period over

    another. This number is typically calculated in terms of month or 13 month mark for fiscal year.
    Average Inventory = (Beginning of Month Inventory + End of Month Inventory)/ 2
    Contribution Margin
    Contribution Margin = Total Sales Variable Costs
    $ Cost = $ Retail x (100% - Markup %)
    $ Retail = $ Cost / (100% - markup %)
    Gross Margin Gross Margin = Total Sales Cost of Goods
    Gross Margin Return on Investment (GMROI) GMROI = Gross Margin $ Average Inventory Cost
    Initial Markup % = (Expenses + Reductions + Profit) (Net Sales + Reductions)
    Inventory Turnover = Turnover = Net Sales Average Retail Stock
    Maintained Markup
    MM $ = (Original Retail Reductions) Cost of Goods Sold
    MM % = Maintained Markup $ Net Sales Amount
    Margin % amount = (Retail Price Cost) Retail Price
    Markup $ amount = Retail Price Cost
    Markup % amount = Markup Amount Retail Price
    $ Markdown = Original retail price - lower retail price
    Net Sales = Gross Sales Returns and Allowances
    Open to Buy= Planned Sales + Planned Markdowns + Planned End of Month Inventory Planned
    Beginning of Month Inventory
    % Increase/Decrease = Difference Between Two Figures Previous Figure
    Cost of Goods + Markup = Retail Price
    Reductions = Markdowns + Employee Discounts + Customer Discounts + Stock Shortages
    Sales per Square Foot = Total Net Sales Square Footage of Selling Space
    Shrinkage= Book Inventory- Physical Inventory.
    Sell-Through % = Units Sold Units Received
    Stock Turn = Net Sales Average Retail Stock
    Stock-to-Sales = Beginning of Month Stock Sales for the Month

    ross Margin = Sales - cost of good sold

    Margin % = ($ Retail - $ Cost) / $ Retail

    Markdown % = $ Markdown / $ Net Sales

    Markup = The difference between the cost of an item and its selling price.
    Sell through % = units sold / (units sold + on hand inventory)

    Turnover = net sales for period / average stock for period


    Here is another way of stating the same formula:
    Cost of Goods Sold from Stock Sales during the Past 12 Months
    Average Inventory Investment during the Past 12 Months
    Inventory turns: The retail sales for a period divided by the average inventory value for that period. Most retailers
    are in the range of two to four turns a year.
    Average Stock = sum of each periods Beginning of Period stock + the last End of Periodstock / # of periods

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