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The ratio of inventory on hand to the number of sales made in a month, giving an insight into stock levels versus sales. The formula is $\text{Stock to Sales Ratio} = \frac{\text{Average Inventory for the Month}}{\text{Sales for the Month}}$.

A measure of how quickly inventory is sold and replaced over a period. Used to assess efficiency in inventory management. The formula is $\text{Inventory Turnover} = \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}}$.

A profit ratio showing the percentage of sales remaining after all operating expenses are paid, used to assess retail business efficiency. The formula is $\text{Operating Margin} = \frac{\text{Operating Income}}{\text{Net Sales}}$.

The average number of days it takes to sell the entire inventory, reflecting the liquidity of inventory. The formula is $\text{DSI} = \frac{\text{Ending Inventory}}{\text{Cost of Goods Sold per Day}}$.

The average stock held by a retailer over a specific period, used in inventory management and turnover calculations. The formula is $\text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2}$.

The difference between the cost of goods sold and sales revenue, reflective of the financial health of retail. The formula is $\text{Gross Margin} = \text{Sales} - \text{Cost of Goods Sold}$.

The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services. The formula is $\text{Gross Profit} = \text{Net Sales} - \text{Cost of Goods Sold}$.

A measure of profitability that calculates the return on a particular investment relative to its cost, important for evaluating the effectiveness of inventory investments. The formula is $\text{ROI} = \frac{\text{Net Profit}}{\text{Cost of Investment}} \times 100\%$.

The amount added to the cost of a product to determine the selling price. Retailers use markup to cover the costs of goods and ensure a profit. The formula is $\text{Markup} = \text{Selling Price} - \text{Cost}$.

The sales level at which a business neither makes a profit nor incurs a loss. In retail, used to understand when upfront investments are recouped. The formula is $\text{Break-Even Point} = \frac{\text{Fixed Costs}}{\text{Price per Unit} - \text{Variable Cost per Unit}}$.

The total revenue from sales transactions minus returns, allowances, and discounts. It provides insight into the actual revenue generated from sales activities.

A cost that does not change in total regardless of how much is produced or sold, such as rent, salaries, or utilities. In retail, fixed costs are essential for budgeting and financial planning.

A reduction from the original selling price, often used to clear inventory. The formula is $\text{Markdown} = \text{Original Price} - \text{Sale Price}$.

A metric used to determine the efficiency of the retail space used, by relating sales to store size. The formula is $\text{Sales per Square Foot} = \frac{\text{Net Sales}}{\text{Total Square Feet}}$.

A retail pricing strategy where the resale price is set at double the wholesale cost. Often used as a simple markup rule. The formula is $\text{Keystone Pricing} = \text{Cost} \times 2$.

A calculation to measure the amount of inventory a retailer sells compared to what was available over a certain period, indicating product demand and sales performance. The formula is $\text{Sell-Through Rate} = \frac{\text{Units Sold}}{\text{Units Available}} \times 100\%$.

The percentage of customers who enter a store and make a purchase, indicating the store’s ability to convert visits into sales. The formula is $\text{Customer Conversion Rate} = \frac{\text{Number of Sales Transactions}}{\text{Total Traffic}} \times 100\%$.

The budget plan for future merchandise purchases, determining how much inventory can be bought without exceeding the stock level goal. The formula is $\text{Open-To-Buy} = \text{Planned Sales} + \text{Planned Markdowns} + \text{Planned End Inventory} - \text{Planned Beginning Inventory}$.

Amount remaining from sales after variable costs are subtracted, indicating how much contributes to covering fixed costs. The formula is $\text{Contribution Margin} = \text{Sales} - \text{Variable Costs}$.