Retail math formulas
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This document provides an overview of basic retail math formulas that retailers should know to effectively run their business. It lists 9 essential formulas for calculating cost of goods, retail price, markup, inventory levels, gross margin, inventory turnover, net sales, open to buy, sell through percentage, and stock to sales ratio. Understanding these fundamental retail formulas is important for tasks like counting inventory, managing costs and profits, and planning purchases.
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Retail math formulas
- 1. Retail Math Formulas – A Basic Overview Love math? Hope so! If you are working in retail at any level, math will definitely be a part of your responsibilities. From counting inventory to managing your open to buy, numbers will be a big part of your day. Below is a break down of the basic math formulas retailers should know in order to run their business’ effectively. Cost of Goods + Retail Markup = Retail Price Retail Price – Cost of Goods = Markup Retail Price – Markup = Cost of Goods Beginning Inventory (in $ or Sku Count) + Purchases – Endoing Inventory = Goods Sold (in $ or Sku Count) Total Sales – Cost of Goods = Gross Margin Gross Margin $ / Average Inventory Cost = Gross Margin Return On Investment Net Sales / Average Retail Inventory (Sku Count) = Inventory Turnover Gross Sales – Returns & Allowances = Net Sales Projected Sales + Projected Markdowns + Planned End of Month Inventory – Planned Beginning of Month Inventory = Open to Buy (OTB) Units Sold / Units Received = Sell Through % Beginning of Month Stock / Total Month Sales = Stock to Sales Ratio