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Items per Sale
number items / number of transactions 127 items / 39 transactions = 3.2 items per sale Low items per sales probably indicates thatthe employee isn’t consistently adding on.
Employee Equations
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Average Sale
total dollars sold / total number of transactions $1083 / 39 transactions = $27.76 avg. sale Low average sale usually means- • the employees isn’t adding on
- • OR is not selling higher priced goods,OR both!
Employee Equations
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Sales Volume Per Hour
total sales / total hours worked $1083 / 7.75 hours = $139.74 per hour
- Low SVPH along with low items per sale and lowaverage sales means poor selling skills.
- Low SVPH with HIGH items per sale and averagesale means not enough time spent selling!
Employee Equations
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Sales Per Sq. Foot
total sales / selling sq. footage $632,546 / 1281= $493.79 per sq. ft.
- Measure of efficiency/productivity
- Compare departments, vendors
- Can be used with linear feet
Sales Calculations
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Inventory Turnover
Inventory Calculations
Sales ÷ Average Stock $300,00 ÷ $100,000 = 3.
- Velocity of merchandise
- Cash flow
- Too high – out of stocks
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National Averages by IndustryFor Sole Proprietorship Businesses Lumber & Building Materials^ Annual InventoryTurnover 7. Paint, Glass & WallpaperHardware Stores 4.53. Retail Nurseries & Garden SupplyGeneral Merchandise Stores 5.16. Auto Parts & AccessoriesApparel & Personal Accessories 4.73. Furniture & Home FurnishingsLiquor Stores 5.06. Antiques & Used MerchandiseSporting Goods 1.74. Gift, Novelty & Souvenir ShopsOther Retail Stores 2.93.
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Cost of Goods Sold
Inventory Calculations
Beginning Inventory + Purchases - Ending Inventory $320,347 + $90,853 – $310,295 = $100,
- Purchases includes freight
- Can evaluate by dept, by vendor
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Gross Margin
Inventory Calculations
Sales – Cost of Goods Sold $32,826 – $14,739 = $18,
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Current Ratio
Financial Calculations
Current Assets ÷ Current Liabilities $472,002 ÷ $385,638 = $1.
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Quick Ratio
Financial Calculations
Current Assets - Inventory ÷ Current Liabilities $472,002 – 52,185 ÷ $405,638 = $1.
