Saturday, 5 April 2014

Useful Retail and Merchandising Metrics/ Formulas

Here are some useful formulas for the retailers and  merchandisers.  We hope you find these useful. Let us know if we missed any other important formulas.

% Amount
% Amount = Rate X Base
Average Earnings per Hours
Total Earnings ÷ Total Number of Hrs Worked
Average Inventory (Month)
(Opening Stock + Closing Stock) ÷ 2
Average Sale per transaction
Gross Sales ÷ Number of Transaction
Average Stock
BOM Stock For Each Month In The Period + EOM Stock For Last Month
Number of Months In The Period + 1
Need –  Purchase
% Amount ÷ Rate
Basic Stock
Average Stock - Average Monthly Sale
BOM Stock
Planned Monthly Sales × Stock – Sales Ratio
BOM Stock
Sales for the month + Basic Stock
Book Inventory
Total Merchandise Handled – Total Retail Deductions
Commission $
Net Sales X Commission %
Contribution Margin
Total Sales - Variable Costs
Retail – Markup
Cost %
Cost of Total Merchandise Handled ÷ Retail of Total Merchandise Handled
$ Cost
$ Retail X Cost %
Cost Compliment %
Retail % – Markup %
Cost of Closing Book Inventory
Retail Value of Closing Book Inventory × Cost %
Cost of Goods Sold (COGS)
Beginning Inventory + Purchases - Ending Inventory
Cumulative Markup %
$ Cumulative Markup  ÷ $ Cumulative Retail
Current Ratio
Current Assets divided by Current Liabilities
Customer Returns %   
$ Returns ÷ $ Gross Sales
Customer Return %
$ Return ÷ $ Gross Sales
Days, Weeks or Months Supply or Cover
Units on Hand (inventory) ÷ Average Sales per Wee
Debt to Worth Ratio
Total Liabilities ÷ Total Owner's Equity
Dollar Cost
$ Retail x  $ Cost%
Dollar Markup
$ Cost  ÷ Cost %
EOM Dating
Calculated from the date the merchandise is received By The Retailer, Rather Than From The Date On The Invoice. For 10/EOM, the last day on which the cash discount may be taken is the 10th of the month. The net period is always an additional 20 Days. An invoice dated on or after the 26th is considered to be dated the first of the following month.
Expense %
$ Expenses ÷ $ Net Sales
Extra Dating
Extends credit for an additional period. On an invoice with terms of 3/10-60x has a cash discount of 40 days (10 Days plus an extra 30). If the invoice is paid within the 40-Day Period, the retailer will receive a 3% Discount.
Estimate Sales
Amount Of Space x Estimated Sales Per Square Foot
FOB Manufacturer's warehouse
Store will pays for the majority of Shipping
FOB Store
Seller pays for the majority of Transportation
% Fresh
Inventory less than 4 weeks ÷ Total Inventory
Gross Cost of Merchandise Sold
Cost of Merchandise Handled – Cost of Ending Inventory
Gross Margin
Profit + Expenses
Gross Margin
Net Sales - COGS
Gross Margin %
$ Gross Margin ÷ $ Net Sales
Gross Margin Dollars
Net Sales – Total Cost of Merchandise Sold
Gross Margin Return on Inventory
Gross Margin $ ÷ Average Inventory At Cost
Gross Sales
Net Sales + Customer Returns
Gross Sales
$ Net Sales ÷ Gross Sales % Compliment
Initial Markup %
(Epra – C) ÷ (Ns + R)
% Increase or Decrease
Difference Between Two Figures ÷ Previous Figure
Inventory Turnover
COGS (Cost of Goods Sold) ÷ Average Inventory @ Cost
Loaded Cost
Net Cost ÷ Compliment of The Cash Discount Desired
Open to Buy (OTB)
Merchandise Needed - Merchandise Available
Open to Buy (OTB)
Planned Sales + Planned EOM Stock + Markdowns – Inventory On Hand – Merchandise On Order
Open to Buy
Beginning Inventory + Receipts – Ending Inventory
Reorder Period
Planned Dollar Markdowns
Planned Sales × Planned Markdown %
Planned Purchases at Cost
Planned Purchases At Retail × (100% – Planned Markup %)
Planned Purchases at Retail
Sales + EOM Stock + Reductions - BOM Stock
Profit/ (Loss)
Gross Margin - Expenses
Profit %
$ Profit ÷ Net Sales
Profit before taxes %
Profit Before Taxes ÷ Net Sales
Quick Ratio
Current Assets - Inventory ÷ Current liabilities
Markdown $
Previous Price – New, Reduced Price
Markdown $
$ Markdowns ÷ $ Net Sales
Markdown %
$ Amount of Markdown ÷ Net Sales
Maintained Markup $
Net Sales – Gross Cost of Merchandise Sold
Maintained Markup %
Maintained Markup $ ÷ Net Sales $
Retail    Cost
Markup %
$ Markup ÷ $ Retail
Markup % Based on Cost
$ Markup ÷ $ Cost
Markup % Based on Retail
$ Markup ÷ $ Retail
Max. Quantity
Rate of Sale (Reorder Period + Delivery Period) + Reserve
Max. Quantity
= Rate of Sale (Lead Time) + Reserve
Net Cost of Merchandise Sold
Gross Cost of Merchandise Sold – Cash Discounts
Net Markdown
Total Markdown – Markdown Cancellation
Net Markdown %
Net Markdown ÷ Actual Sales
Net Sales
Gross Sales  Customer Returns
Net Sales
$ Profit ÷ Profit %
Return %
$ Returns ÷ Gross Sales
Regular Dating
Calculated From The Date of The Invoice. 3/10 N/30 means that a 3% Discount can be taken if the invoice is paid within 10 Days. If it is not paid within 10 Days, the amount is due within 30 Days of the invoice.
% Amount ÷ Base
Cost + Markup
Return on Assets (ROA)
Profit Before Taxes ÷ Net Assets
ROG Dating
Discount Date is calculated from the end of the month instead the date of the invoice.
Sales per Employee hour
Net Sales ÷ Number of Employee Work Hours
Sales per Full time equivalent
Net Sales  ÷ Number of Full Time Equivalent Employees
Sales per Linear foot
$ Sales ÷ Linear Feet of Shelving
Sales per Sq Foot of Gross Space
Net Sales ÷ Square Feet of Space In Store
Sales per Square Foot of Selling Space
Net Sales ÷ Square Feet of Selling Space
Selling Cost %
Gross Wages ÷ Net Sales
Sell Through Rate %
Units Sold ÷ Units Received
Shortage %
Amount of Shortage ÷ Net Sales
Skeletal Profit and Loss
Skeletal Profits and Loss
Net Sales – COGS = Gross Margin –  Expenses = Profit/Loss
Skeletal Profits
Net Sales - COGS = Gross Margin - Expenses = Profit + Other Income = Net Profit Before Income Tax
Stock Sales Ratio
BOM Retail Stock ÷ Sales For The Month
Stock to Sales $ Ratio
Opening Stock ÷ Sales for the Month
Stock to Unit Sales Ratio
Stock in units divided by unit sales
Stock Turn
Annualised Sales ÷ Average Retail Inventory
Stock Turnover
Net Sales At Retail ÷ Average Stock At Retail
Total Cost of Merchandise Sold
Net Cost of Merchandise Sold + Alteration Costs
Net Sales%
(Always) 100%

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