10-Stock turn

# 10-Stock turn - Making Money Making Money Markup % +...

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Making Money

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Making Money Markup % + Stockturn Rate Cost of Goods Sold Average Inventory at Cost STR =
Making Money Beginning Inventory (B.I.) + Purchases Cost of Goods Available for Sale - Ending Inventory (E.I.) Cost of Goods Sold (CGS) CGS Gross Margin (GM) Expenses Net Profit NS - CGS = GM 100% - 30% = 70% (BI + EI)/2 = Average Inventory Gross Sales (GS) - Returns & Net Sales (NS) - -

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STR STR = CGS Ave Inv (C) If G.M. = 40% of NS, what NS are required to obtain a STR of 5 if Ave Inv (C) = \$100,000? 5 = .6NS 100,000 500,000 = .6NS NS = \$833,333 If GM = 20% of NS, what NS are required to obtain a STR of 10 if Ave Inv (C) = \$500,000? 10 = .8NS 500,000 5,000,000 = .8NS NS = \$6,250,000
Pricing STR = CGS NS BI Ave. Inv (C) -CGS + Purch GM CGAS -E.I CGS (B.I. + E.I.)/2 = Ave Inv. IF CGS = \$2,000,000 E.I = 400,000 Purchased 500,000 worth of products -- what is STR?

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Pricing B.I 1,900,000 + Purchases 500,000 CGAS 2,400,000 - EI 400,000 CGS 2,000,000 (1,900,000 + 400,000)/2 = Ave Inv = 1,150,000 STR = 2,000,000 = 1.7 1,150,000
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## This note was uploaded on 03/19/2012 for the course MAR 3023 taught by Professor Philipdowns during the Fall '12 term at Florida State College.

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10-Stock turn - Making Money Making Money Markup % +...

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