Download retail math cheat sheet and more Cheat Sheet Retail Marketing in PDF only on Docsity! Retail Math CHEAT SHEET THESE SAMPLE FORMULAS ARE BASED ON THE DATA BELOW DATA FOR 13 WEEKS: LY POS Sales TY POS Qty TY POS Sales TY Ship Cost TY Ship Retail TY Markdowns Current Inv @ Retail Weeks On Hand Avg. Inventory @ Retail Avg. Inventory @ Cost $1,000,000 240,000 $1,200,000 $1,040,000 $1,300,000 $60,000 $369,200 4.00 $380,000 $304,000 01 02 03 04 05 06 Sales Increase % LY Sales TY Sales Average Price POS Sales POS Qty Sls Inc%=(TY Sls - LY Sls) / LY Sls LY Sls = TY Sls / (Sls Inc % + 1.00) TY Sls = LY Sls * (Sls Inc % + 1.00) Avg. Px = POS Sales / POS Qty Sls = POS Qty * Avg Px Qty = POS Sales / Avg Px CALCS 20.0% $1,000,000 $1,200,000 $5.00 $1,200,000 240,000 07 08 09 10 11 12 13 14 15 16 17 Initial Margin Cost Retail Markdown % Markdown $ POS Sales Maintained Margin Therefore –> Therefore –> Initial Margin Markdowns MU% = (Rtl - Cost) / Rtl Cost = Rtl * (1.00 - MU%) Rtl = Cost / (1.00 - MU%) MD% = MD$ / POS Sales MD$ = POS Sales * MD% Sls = MD$ / MD% MM% = MU% - MD%Cost MD%Cost = MD%Rtl * CC% CC% = 1.00 - MU% MM% = MU% - (MD% * (1.00 - MU%)) MM% = MU% + (MD% * MU%) - MD% MU% = (MM% + MD%) / (1.00 + MD%) MD% = (MM% - MU%) / (MU% - 1.00) CALCS 20.0% $1,040,000 $1,300,000 5.00% $60,000 $1,200,000 16.00% 4.00% 80.00% 16.00% 16.00% 20.00% 5.00% 18 19 20 21 22 23 24 25 26 27 28 Inventory Turns (Ann) Ann Rtl Sls Avg Rtl Inv Shortcuts –> Return on Investment Ann GP$ Avg Cost Inv Shortcut –> Turns = Ann Rtl Sls / Avg Rtl Inv Ann Rtl Sls = Avg Rtl Inv * Turns Avg Rtl Inv = Ann Sls / Turns Turns = 52 / W.O.H. W.O.H. = 52 / Turns R.O.I.I. = Ann GP$ / Avg Cost Inv Ann GP$ = Avg Cost Inv * R.O.I.I. Avg Cost Inv = Ann GP$ / R.O.I.I. R.O.I.I. = (MM% / CC%) * Turns MM% = (R.O.I.I. / Turns) / (1 + (R.O.I.I. / Turns)) Turns = R.O.I.I. / (MM% / CC%) CALCS 12.63 $4,800,000 $380,000 13.00 4.12 2.53 $768,000 $304,000 2.41 16.00% 12.63 ASSET EFFICIENCY MEASURES PROFITABILITY MEASURES VOLUME MEASURES Sls = Sales. Could be unit or dollars. POS Qty is sales units. POS Sales represents sales dollars. MU = Markup. Usually represents initial margin percentage (MU%) MD = Markdowns. Usually represents markdown dollars as a percentage of retail sales dollars (MD%) GMROII or ROI = Gross Margin Return on Inventory Investment, or simply Return Investment. W.O.H. = Weeks on Hand. Number of weeks worth of sales that is currently in inventory. 13 W.O.H. means that current inventory levels are equivalent to 13 weeks worth of sales. GP = Gross Profit. Could be dollars (GP$) or percent of retail sales (GP%). CC = Cost Complement. The opposite of MU% or MM%. If MU% is 20%, then CC% is 80%. If MM% is 16%, the CC% is 84%. INV = Inventory MM% = Maintained Margin PX = Price Avg = Average ABBREVIATIONS w w w. 8 t h A n d Wa l t o n . c o m
