Retail Formula: Retail by Numbers


Mostly used by the retail employee, sales manager, buyer, and other related individuals. Widely used to evaluate current inventory status, purchasing plans, sales analysis, markup and mark-down prices, etc.

  1. Acid Test / Quick Ratio / Liquid Ratio 
    • mengukur kemampuan perusahaan untuk menggunakan asetnya sesegera mungkin, atau keberadaan aset yang paling mudah diuangkan.
    • Umumnya ratio perbandingannya 1:1 or better.
    • Acid Test Ratio = (Current Assets - Inventory) / Current Liabilities
  1. Basic retailing Formula
    • Retail Price = Cost of Goods + Markup
  2. Average Inventory
    • Digunakan untuk menghitung Inventory Turn rate dan GMROI
    • Average Inventory (Month) = (Beginning of Month Inventory + End of Month Inventory) / 2
  3. Break-Even Analysis
    • BEP of product is when Total Revenue Received = Total Cost of the product
    • Break-Even ($) = Fixed Costs / Gross Margin Percentage
  4. Contribution Margin
    • merupakan marginal profit per unit sale
    • fraksi sales yang berkontribusi pada offset of fixed cost
    • Contribution Margin = Total Sales - Variable Costs
  1. Cost of Good Sold (COGS)
    • Biaya yang dipakai langsung untuk produksi produk (biaya material, pegawai, operational, listrik, air)
    • Belum termasuk distribution cost dan sales force cost
    • Muncul di income statement dan dapat digunakan untuk menentukan gross margin (Revenue - COGS = Gross Margin)
    • COGS = Beginning Inventory + Purchases - Ending Inventory
  1. Gross Margin
    • Gross Margin = Total Sales - Cost of Goods
  2. Gross Margin Return Of Investment (GMROI)
    • GMROI = Gross Margin / Average Inventory Cost
  1. Initial Markup Percentage (%)
    • Markup harga yg bertujuan untuk dapat meng-cover cost of all item, incidental expenses, dan untuk mendapatkan reasonable profit) 
    • Metode konvensional adalah dengan melipatgandakan biaya produksi (2x COGS)
    • Initial Markup = (Operating Expenses + Price Reductions + Profit) / (Forecast Net Sales + Price Reductions)
  2. Inventory Turnover / Inventory Turns / Stock Turns
    • menyatakan berapa kali inventory terjual atau terpakai dalam satu periode (misal 1 tahun)
    • Inventory Turnover = COGS / average inventory
    • Inventory Turnover = Net Sales / Average Retail Stock
  1. Maintained Markup
    • Maintained Markup ($) = (Original Retail - Reductions) - COGS
    • Maintained Markup (%) = Maintained Markup ($) / Net Sales Amount
  2. Margin Percentage (%)
    • Margin % = (Retail Price - COGS) / Retail Price
  1. Markup (Keuntungan yg ingin dicapai)
    • Merupakan selisih dari Selling Price dan Cost of Goods 
    • Markup ($) = Retail Price - Cost
    • Markup (%) = Markup Amount / retail Price
    • Bertujuan untuk mendapatkan / menciptakan profit
  2. Net Sales
    • merupakan Operating Revenue yang diperoleh ketika produk terjual
    • dalam income statement langsung dicantumkan sebagai Sales atau Net Sales
    • Sales dikatakan terjadi jika product sudah delivered dan pembayaran sudah masuk ke rekening perusahaan. Jika tidak maka dikatakan sebagai "Outstanding Orders".
    • Net Sales = Gross Sales - Returns & Allowances


  1. Open To Buy
    • Dollar Amount Budgeted for Inventory Purchases for a specific time period
    • OTB (retail) = Planned Sales + Planned Markdowns + (Planned End of Month Inventory - Planned Beginning of Month Inventory)
  2. Percentage Increase / Decrease
    • Percent Increase or Decrease = Difference between 2 figures / Previous Figure
  3. Reductions
    • Reductions = Markdowns + Employee Discounts + Customer Discounts + Stock Shortages
  4. Sales per Square Foot
    • Merupakan standar  / pengukuran primer untuk sebuah kesuksesan toko
    • Sales per Square Foot = Total Net Sales / Square Feet of Selling Space
  5. Sell - Through Rate
    • Sell Through (%) = Unit Sold / Unit Received
  6. Stock to Sales Ratio
    • Stock to Sales Ratio = Beginning of Month Stock / Sales for the month

Retailer
Detailed formulas can be found at here

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