Input Review Retail Terms Formulas amp Example Problems Sales Ratio Visual Technical Topics Potential Interview Questions General Interview Advice FORMULA INPUTS Retail Sales the revenue a particular item produced ID: 781696
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Slide1
RETAIL MATH PRACTICE
Slide2AGENDA
Input ReviewRetail Terms, Formulas & Example ProblemsSales Ratio VisualTechnical Topics Potential Interview Questions
General Interview Advice
Slide3FORMULA INPUTSRetail Sales- the revenue a particular item produced
Units- describes the actual productCost- how much an item cost to produceMargin- profitCan be expressedPer individual unit Total for the product
Slide4AUR- Average Unit Retail
Definition
The average price a customer is paying for an itemFormulaTotal Retail Sales $/ Total Units Sold
Slide5AUR ExampleJCrew sold 8000 units and reported weekly sweater sales to be $320,000. What was the AUR of the sweater?
320,000/8,000=$40On average, the customer paid $40 for a given sweater
Slide6AUC- Average Unit Cost
Definition
The average cost to produce an itemFormulaTotal Cost/ Total Units
Slide7AUC ExampleOld Navy buys $60,000 worth of polos
from the vendor and sells 12,000 units. What is the AUC for polos? 60,000/ 12,000= $5It cost Old Navy $5 per unit to produce a certain sweater
Slide8Percent Change in Sales
Definition
The increase or decrease in sales to compare between two periodsFormulaThis period sales – last period sales/ last period sales *100
Slide9Percent Change in Sales ExampleLast year Lord & Taylor sold $1,500 of hats. This year they sold $1,575 in hats. What is the % change in sales?
(1,575-1,500/1,500)* 100 = 5% increaseThis year, Lord & Taylor sold 5% MORE hats than they did last year.
Slide10APS- Average Per Store
Definition
The number of units sold in an average store for a given time period FormulaTotal units sold/ # of stores with inventory
Slide11APS ExampleRalph Lauren sold 7,200 pairs of dress socks last week and has a total of 30,000 stores. 8,000 of the carry the dress socks. What is the APS?
7,200/ 8,000 = 0.9This week, on average each Ralph Lauren store that carries this style sold almost 1 pair of socks
Slide12Gross Margin
Gross Margin $Gross Margin %
Definitionthe difference between retail sales dollars and the cost of those sales.Formula Retail Sales $ - CostDefinitionPercentage of sales to costFormulaRetail Sales $ - Cost / Retail Sales $
Slide13Gross Margin ExamplesTarget sells 50,000 Hanes T-shirts for a total of $200,000. Target bought the inventory for a total of $92,000. What is the margin $ and margin %?
Gross Margin $200,000-92,000= 108,000Gross Margin %108,000/200,000 = 54% marginOf the sales Target made for Hanes shirts, $108,000 / 54% of the money they received from the sale was profit
Slide14Markdown
Markdown $:Markdown %:
DefinitionReduction in the initial retail priceFormulaOriginal Cost – Reduced CostDefinitionPercentage of markdowns in relation to sales volumeFormula Original Cost- Reduced Cost/ Original Cost
Slide15Markdown ExamplesZara sells a leather jacket for $62. Since this jacket was over-bought, it goes on sale for $48. What are the markdown dollars and markdown %?
Markdown $: 62-48= $14Markdown %: 62-48/62= 22.5%Each of Zara’s jackets cost are $14 and 22.5% less than original price
Slide16Markup
Markup $Markup %:
DefinitionThe difference between retail of merchandise and the cost of that merchandiseFormulaRetail Price - Cost of MerchandiseDefinitiondetermines the retail price of merchandise sold to customersFormulaRetail Price- Cost of Merchandise / Retail Price
Slide17Markup ExampleH&M buys shorts for $20 per unit and retails it for $32. What is the markup dollars and % on the pair of shorts?
Markup $: 32-20= 12Markup %: 32-20/32 = 37.5% H&M Marks up the product by $12 or 37.5% from the cost to the ticket price.
Slide18Sell Through %
Definition
Percentage of inventory sold for a given time periodFormulaUnits Sold/ Beginning On-Hand Inventory
Slide19Sell Through % ExampleAt the beginning of the week Macy’s had 30,000 units on hand and sold 18,000 units. What was the sell through for the week?
18,000/30,000 = 60%Last week, Macy’s sold 60% of the given inventory for a particular product
Slide20Turnover
Definition
The amount of times the average inventory sells in a given time periodFormulaSales/Average InventoryAverage InventoryAverage inventory= BOP inventory + EOP inventory/ # of periods
Slide21Turnover exampleNike has an average inventory of 600 units and sold 1,525 units. What is the turnover for Nike?
1525/600= 2.54 Last year, Nike sold through all of their inventory 2.5 times
Slide22Weeks of Supply
Definition
Number of units to support the current sales trendFormulaUnit Stock on Hand/ Average Weekly Sales
Slide23Weeks of Supply Example
Neiman Marcus has $10,000 worth of inventory in denim. The total sales for the past 5 weeks are $20,000. What are the weeks of supply on hand for denim?20,000/5= 4,000 (average weekly sales)10,000/4,000= 2.5 WOSGiven current inventory levels, if Neiman Marcus were to maintain their selling rate, they have enough product to last 2.5 weeks
Slide24Sales Ratio Visual
Slide25Factors Affecting SalesPromotions/Pricing
CalendarMarketing EventsStore PlacementInventory Positioning
Slide26Tops Down vs. Bottoms Up AnalysisTwo ways to analyze the product or business
Helps you tell a story and analyze trendsTops down: looking from broad to narrowHow did the company perform? How did the women’s division perform? How did women’s sweaters perform?Bottoms up: looking narrow and then broadHow did the plum color perform of a specific shirt?How did that overall style perform?
How did women’s blouses perform?
Slide27Allocation FactorsSeasonClimate
Tastes/ Preferences of a RegionIncome Level
Slide28Pricing Considerations‘If you were to launch a new tablet into the market, how would you price the item? What would be the main financial risks?’
How much does an item cost to produce?Are you looking to hit a certain margin?Does a similar item exist in the market or is this an innovation?What is the competition pricing?
Slide29Potential Technical Questions
If you were given 5,000 units of sweaters to distribute, how would you go about allocating them to various stores?Name 3 retailers and what they are doing to set themselves apart from the competition. What are trends you see on campus? How do you keep up with trends?If you could change something about our stores, what would you change?/ What is an area you feel we could improve in?Explain brand cannibalism.
How would you describe your personal style?If you were to launch a new tablet into the market, how would you price the item? What would be the main financial risks?
Slide30Tips for Behavioral Questions…Give specific situation examplesWalk the interviewer through your thought process
STAR method!Quantify your experiencesUse personal experiences to demonstrate learning
Slide31Potential Behavioral Questions
Tell me about a time you were a leader and how the situation turned out.Describe a time you had a conflict with a boss or colleague and how you resolved the issue/ how the situation turned out.How would you rate yourself in Excel? Tell me about a time you used data to solve a problem.What you are most proud?Tell me about a time you had to think on your feet & making a quick decisionTell me about a time you have failed or underperformed in a project or task and what you did to make it right.
Slide32Final Tips
Read recent company press releases and know what is going on in the industryCompany websiteUA library resourcesLinkedInKnow why you want to work in the industry and for a specific companyFamiliarize yourself with some company metricsLast year revenueStock price
Market share