ch8_finances_S2010

ch8_finances_S2010 - Obstacles are those frightful things...

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Unformatted text preview: Obstacles are those frightful things you see when you take your eyes off the goal.- Henry Ford , Founder of Ford Chapter 8 Managing a Retailers Finances Developing the Merchandise Budget What is Merchandising? Activities involved in acquiring particular goods and/or services and making them available at the right place, time, price and quantity that enable a retailer to reach its goals. Listen up homeys! You gotta always ask six major merchandising questions dude! And not only that, man! They got RULES that need to be followed!! And they dont SUCK! Plan in advance, before the selling season starts. Keep the plan simple and make sure everybody understands it. Plan short- to mid-term, not too far out. Allow flexibility to be able to respond to changes. 4 Quarter Merchandise Plan Planned: Q1 Q2 Q3 Q4 BOM Stock $225,000 $270,000 $180,000 $210,000 Sales $75,000 $90,000 $60,000 $70,000 Markdowns $3,750 $7,200 $3,000 $3,500 EOM Stock $270,000 $180,000 $210,000 $200,000 Purchases @ Retail $123,750 $7,200 $93,000 $63,500 Purchases @ Cost $74,250 $4,320 $55,800 $38,100 Initial Markup 40% 40% 40% 40% Gross Margin $49,500 $2,880 $37,200 $25,400 BOM Stock-to-Sales 3 3 3 3 Markdown %age 5% 8% 5% 5% Major cool! Now were going to talk about retail accounting statements! Meet the Income Statement A summary of a retailers revenues and expenses over a given period of time that can be compared with a comparable period of time in the past. Components of an Income Statement Net Sales $330,000 Cost of Goods Sold $180,000 Gross Profit $150,000 Operating Expenses $ 95,250 Other Costs $ 20,000 Total Costs $115,250 Net Profit before Taxes $ 34,750 Taxes $ 15,500 Net Profit after Taxes $ 19,250 Income (P&L) Statement Example Income Statement Items to Remember: Gross sales Net sales Cost of goods sold Gross margin Operating expenses Operating profit Other income & expenses Net profit The Balance Sheet is a statement of a companys assets and liabilities - a snapshot at an exact moment in time. The Balance Sheet is a Snapshot Current Assets Fixed Assets Liabilities Net Profit Net Worth The Balance Sheet Measures Asset Turnover Financial Leverage Liquidity Solvency Return on Assets Parts of the Balance Sheet Assets Cash $130,000 Accts Receivable $180,000 Inventory $400,000 Current Assets $710,000 Property $800,000 Machinery & Equip $350,000 Long Term Assets $1,150,000 Total Assets $1,860,000 Liabilities Accts Payable $180,000 Notes Payable $70,000 Current Liabilities $250,000 Bonds Payable $150,000 Mortage Payable $500,000 Long Term Liabilities $650,000 Total Liabilities $900,000 Owner's Equity $960,000 Balance Sheet Example Balance Sheet Items to Remember: Assets Accounts receivable Prepaid expenses Retail inventories Noncurrent (fixed) assets Goodwill Liabilities Accounts payable Owners equity...
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This document was uploaded on 11/04/2011 for the course MKTG 436 at S.F. State.

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ch8_finances_S2010 - Obstacles are those frightful things...

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