Tag Archives: business math problems

The Fundamentals Of Retail Math

Merchandising Math Handbook for Retail Management

Fundamentals of Retail Math

Numbers drive a business.  No one will question that.  But business owners, to make sound decisions,  use fundamental tools which include:

  • basic retail math formulas
  • forms and reports in which the numbers are used
  • technology used to integrate the numbers into logical, easy-­to-use formulas

The basic retail math formulas are driven by fundamentals of fractions, decimals, dozens, and round­ing in order to work with and use percentages as a means of comparison.  For example, in merchandising we speak in fractional terms all the time, but when working out problems, we have to write the decimal equivalent of the fraction.  Most calculators don’t have keys for working with fractions, and software programs like Excel require that you are able to write the decimal equiv­alents of fractions so you can solve retail math problems.  This allows merchants to calculate something as simple as taxes, or the number of pieces of merchandise to transfer or to compare this year’s sales to last year.

Learn more about determining the percentage of sales increases or decreases  just by reading Lesson 1 in the Math for Merchandising Retailer’s Handbook.

Retail Management – Purchasing and Pricing Plans

Merchandising Math Handbook for Retail Management

What should someone pay?  How much did it really cost to make?  Did you ever wonder how much the designer really makes?

All of these are valid questions-ones you can calculate!  That is right, applying fundamental math skills in some easy to use formulas and forms, you can calculate numbers so you have the best information on hand to make the right business decisions.   Continue reading Retail Management – Purchasing and Pricing Plans

Retail Sales – Planning and Forecasting

Merchandising Math Handbook for Retail Management

Business profits are driven by careful planning.  This includes developing business plans that evaluate and forecast:

  • sales, working with the sales volume, or net sales
  • stock, including stock-to-sales ratios, average stock, and turnover.
  • markdowns (stock reductions)
  • purchases both at retail and at cost

Calculating available purchases, known as the  Open-to-Buy (OTB), which is the dollars available to spend during a specific period of time, is a constantly changing number that provides a check and balance system to maintain merchandise flow. Continue reading Retail Sales – Planning and Forecasting

Retail Sales – Profitability

Merchandising Math Handbook for Retail Management

No one will question that profits are the name of the game.  So, just what has to be measured to figure out if your business is profitable–and even more importantly, what do you evaluate and how can you analyze what shifts and changes can increase your bottom line.

The simplest of business math skills will help you determine the sales per square foot of retail space and the financial profitability of a business.  If you are operating a healthy business you can see it in the strenght of the sales per square foot and in the details of an operating statement. Continue reading Retail Sales – Profitability