Review

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# Review - PowerPoint PPT Presentation

Review. Return on Investment is a calculation that is used to determine the relative profitability of a product Profit / Investment = Return on Investment Break Even Point is the point at which sales revenue equals the costs and expenses of making and distributing.

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## PowerPoint Slideshow about ' Review' - egan

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Presentation Transcript
Review
• Return on Investment is a calculation that is used to determine the relative profitability of a product
• Profit / Investment = Return on Investment
• Break Even Point is the point at which sales revenue equals the costs and expenses of making and distributing.
• Price sold at / Cost of making and marking = Break Even

### Pricing math

Because Everyone takes to long to take notes.
• (P) – Price
• (D)% - Discount Percent
• (D)\$ - Discount Dollars
• (NP) – Net Price
• (SP) – Sales Price
• (C) - Cost
• (MM)\$ - Maintained Markup Dollar
• (MM)% - Maintained Markup Percentage
• (MD)\$ - Markdown Dollar
• (MD)% - Markdown Percentage
• (MU)\$ - Markup Dollar
• (MU)% - Markup Percentage
Profit vs.Markup
• Basic Markup Calculations
• Cost (C) + Markup (MU) = Retail (RP)
• Retail Price (RP) – Markup (MU) = Cost (C)
• Retail price (RP) – Cost (C) = Markup (MU)
Percentage Markup
• Determine the dollar markup
• RP – C = MU\$
• Change the dollar markup to the percentage markup, divide it by the retail price. Result will be a decimal
• MU\$/RP = MU%
• Change the decimal to a percentage
• .40 = 40%
Calculations for lowing prices
• Markdowns – Reduce the quantity of goods in stock, a business will sometimes mark down merchandise by a certain percentage.
• Retail Price (RP) x Markdown % = (MD)\$
• Retail Price (RP) – Markdown\$ = Sales Price (SP)
Calculations for lowing prices
• Maintained Markup – Different between an item’s final sale price and its cost.
• Retail Price (RP) – Markdown\$ = Sales Price (SP)
• Maintained Markup
• SP – C = Maintained Markup (MM)\$
• Determine the maintained markup percentage
• (MM) \$ Divided by SP = (MM)%
discounts
• Discount is a reduction in the price of good and services sold to customers.
• Multiply the price by the discount percentage to get the dollar amount of the discount
• (P) x (D)% = (D)\$
• Subtract the discount from the price to get the net price
• (P) – (D)\$ = NP
Discounts
• Cash Discounts is a discount offered to buyers to encourage them to pay their bills quickly
• Determine the dollar discount
• (P) x (D)% = (D)\$
• Determine the net price
• (P) – (D)\$ = (NP)