Retail Math

Question 1

Annual Turnover @ Cost

Answer 1

Annual Sales @ Cost (or Cost of Goods Sold / Average Annual Inventory @ Cost

Question 2

Average Annual Inventory @ Cost

Answer 2

53 Weeks ending inventory / 53

Question 3

Build

Answer 3

The relationship of one period of sales compared to another and expressed as a percent.

Question 4

Convert OTD Sales to Cost Sales

Answer 4

OTD sales X Complement of the Gross Margin

Question 5

Cost Complement

Answer 5

1 – Initial Markon %

Question 6

Cumulative Markon Definition

Answer 6

The aggregate markon of the total ownership. It is the sum of the beginning inventory markon, plus the receipt markon, plus price changes

Question 7

Cumulative Markon Formula

Answer 7

Beginning Inventory + Receipts + Price Changes

Question 8

Future Weeks Supply Definition

Answer 8

The number of future planned sales it would take to dispose of the current in-store stock on hand.

Question 9

Future Weeks Supply Formula

Answer 9

Current Inventory / X Sales per week

Question 10

Gross Margin (Selling Gross)

Answer 10

The difference between the landed cost and the actual Out-the-Door (OTD) price.

Question 11

Gross Margin Percent Definition

Answer 11

The gross margin dollar amount divided by the OTD price.

Question 12

Gross Margin Percent Formula

Answer 12

Gross Margin / Sale price

Question 13

Gross Margin Return on Investment (GMROI) Definition

Answer 13

A productivity measurement that allows you to evaluate the relative pay back for different investments.

Question 14

Gross Margin Return on Investment (GMROI) Formula

Answer 14

Gross Margin Dollars / Average Inventory $ (at cost)

Question 15

Initial Markon Definition

Answer 15

The difference between the first cost of goods and the retail price.

Question 16

Initial Markon Formula

Answer 16

Retail price – First Cost

Question 17

Initial Markon Percent Definition

Answer 17

The initial markon dollar amount divided by the retail price

Question 18

Initial Markon Percent Formula

Answer 18

Initial Markon Dollars / Retail price

Question 19

Landed Markon

Answer 19

The difference between Retail and the First Cost of goods plus any other cost incurred in delivering the product to the store.

Question 20

Landed Markon Percent Definition

Answer 20

The landed markon dollar amount divided by the retail price.

Question 21

Landed Markon Percent Formula

Answer 21

Landed Markon Dollars / Retail Price

Question 22

Markdowns

Answer 22

A reduction to the original retail price.

Question 23

Markdown Rate Definition

Answer 23

The percent off divided by the complement of the percent off.

Question 24

Markdown Rate Formula

Answer 24

% Off / Complement of % off

Question 25

Permanent Markdowns (Hardmark)

Answer 25

A reduction to the value of the inventory

Question 26

Point of Sale Markdowns

Answer 26

A reduction to each unit sold, not the entire owned inventory.

Question 27

Retail Price

Answer 27

100% of the total cost

Question 28

Sell Through Percent Definition

Answer 28

Quantifies how much inventory was sold as a percentage of the available in-store inventory for the period

Question 29

Sell Through Percent Formula

Answer 29

Sales / Sales + Ending Inventory

Question 30

Stock to Sales Ration (S/S/Weeks Supply) Definition

Answer 30

The number of weeks at the current rate of sale it would take to dispose of the stock on hand in the store.

Question 31

Stock to Sales Ration (S/S/Weeks Supply) Formula

Answer 31

End of Week Inventory / Net Sales

Question 32

Turnover

Answer 32

The number of times you buy and sell your inventory in a given period of time.

Question 33

Retail Price=

Answer 33

Retail Price = Cost + Markon

Question 34

Markon Dollars=

Answer 34

Retail Price x Markon Percent

Question 35

Cost =

Answer 35

Cost = Retail – Markon

Question 36

MD$ (Markdown Amount)=

Answer 36

(Original Retail – Markdown) Units Sold = MD$

Question 37

What is the Gross Margin dollar amount and percent?

Answer 37

Gross Margin=Sales Price - Cost