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What is Retail Formulas?

Retail Formulas are mostly used by retail employees, retail managers, retail buyers and other retail business related individuals. It is widely used to evaluate the current inventory status, inventory purchasing plans, sales analysis, markup and markdown prices etc.


Performing these retail formulas often requires familarity with formulas, We've included all the required retail related formulas in this website from where you can use the equations to track merchandise, measures sales performance and help create pricing strategies.

  • Acid - test
  • Acid-Test measures the ability of a company to use its quick assets to immediately extinguish its current liabilities.

  • Average Inventory
  • Average Inventory calculates the inventory Turn Rate and Gross Margin Return on Investment.

  • Cost of Goods Sold
  • Cost of goods sold (COGS) includes the direct costs attributable to the production of the goods sold by a company

  • Break- Even Analysis
  • Break Even Analysis is a process of determining the number of units that must be sold at a given price to recover cost and make a profit.

  • Contribution Margin
  • Contribution Margin is a marginal profit per unit sale.

  • Margin %
  • Margin Percentage (%) is calculated with Retail price and Cost of goods.

  • Initial Markup
  • Initial markup is the average markup required on all products to cover the cost of all items, incidental expenses, and to obtain a reasonable profit.

  • Gross Margin Return on Investment
  • Gross Margin Return on Investment shows the relationship between total operating profits and the average inventory investment (at cost) by combining profitability and sales-to-stock measures.

  • Gross Margin
  • Gross Margin is the difference between the sales and the production costs including the overhead.

  • Inventory Turnover
  • Inventory turnover is an equation that measures the number of times inventory is sold or used over a period.

  • Markup
  • Markup is the difference between the cost of a good or service and its selling price

  • Open to Buy
  • Open to buy is the dollar amount budgeted by a business for inventory purchases for a specific time period

  • Reductions
  • Reductions is the amount or rate by which a product is reduced.

  • Sales per Square Foot
  • Sales per Square Foot (Sales Per Unit Area) is a standard and usually the primary measurement of store success

    This page uses content from the English Wikipedia. The content of Wikipedia is available under the GNU Free Documentation License.

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