merch math terminology

what is this year

(TY) current years sales, inventory, or other financial information

what is last year

(LY) previous years sales inventory or other financial information

what is Build

the percentage of growth or decline from one period to the next (TY sales- LY sales)/ LY sales

what is cost

amount the retailer pays for merchandise

what is retail

the price the customer pays for merchandise

what is mark up and another name for it

MU, amoutn of money added to the cost to arive at the retail price (retail- cost)

what is mark up % and the equation

markup expressed as a percentage of retail

(retail- cost)/ retail

what is margin and the equation

amount of money remaining from a sale after subtracting the cost of the merchandise (retail- cost)

what is markdown (MD)

reduction in the retail price of the merchandise

gross sales

total sales before customer returns and allowances

what is net sales

gross sales minus customer returns and allowances

what is customer return

merchandise returned by a customer for a refund or credit

cost of goods sold (COGS)

cost of merchandise that has been sold

what is gross margin

net sales minus cost of goods sold

what are operating expenses

costs associated with running the business

what are direct expenses

expenses that can be directly traced to producing a good such as labor and materials

what are indirect expenses

general expenses that support business operations such as rent and utilites

what is net profit

gross margin minus operating expenses

what is net loss

occurs when operating expenses are greater than gross margin

what is inventory

merchandise or stock available for sale

what is turn over

number of times inventory is sold and replaced during a period

what is sell through

percentage of merchandise sold compared with the amount available for sale

what is open to buy (OTB)

amount of money available to purchase merchandise during a specified period

on order

merchandise that has been ordered but has not yet been received

what is assortment planning

planning the mix of merchandise within a department or store

what is sku (stock keeping unit)

unique identifier used to identify a specific merchandise item

what is merchandise plan

plan for sales inventory markdown purchases and markups

what is cash discount

discount offered for paying an invoice within a specified period

permanent markdown

markdown that permanetly reduces an items retail price, often referred to as clearance

outdate

last date merchandise is planned or authorized to be available for sale

vendor

company or supplier that sells merchandise to a retailer

planned sales

amount of sales expected for a specified period

planned purchases

amount of merchandise planned to be pruchased during a specific period