Merchandising processes formulas

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6 Terms

1

Net sales

gross sales - customer returns/allowances

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2

gross margin

net sales - cost of goods sold

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3

Expenses

(total overhead/operating expenses)/ net sales

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4

operating profit

gross margin/operating expenses

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5

inventory turnover

net sales/ average inventory

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6

SKU

#of colors x #of sizes x #of styles

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