Retail math · By role
Retail Math for Executives in Apparel
GMROI, working capital in inventory, EBITDA impact of markdown, and gross-to-net sales — the executive math that connects merchandising decisions to the P&L.
17 formulas for executives
InventoryAlso: Planner
Open-to-Buy (OTB)
OTB = Planned Sales + Planned EOP + Planned Markdowns − Planned BOP − Receipts on Order
MarginAlso: Merchandiser
Initial Markup % (IMU)
IMU % = (Retail Price − Cost) ÷ Retail Price × 100
MarginAlso: Merchandiser
Maintained Markup % (MMU)
MMU % = (Net Sales − COGS) ÷ Net Sales × 100
Productivity
Gross Margin Return on Investment (GMROI)
GMROI = Gross Margin $ ÷ Average Inventory at Cost
ProductivityAlso: Supply Chain / Ops
Inventory Turns
Turns = COGS ÷ Average Inventory at Cost
MarginAlso: Merchandiser
Markdown %
Markdown % = Markdown $ ÷ Net Sales × 100
MarginAlso: Merchandiser
Gross Margin %
Gross Margin % = (Net Sales − COGS) ÷ Net Sales × 100
MarginAlso: Merchandiser
Allowances %
Allowances % = (Markdowns + Discounts + Chargebacks) ÷ Gross Sales × 100
ProductivityAlso: Planner
Plan vs Actual Variance %
Variance % = (Actual − Plan) ÷ Plan × 100
SalesAlso: Analytics
Average Unit Retail (AUR)
AUR = Net Sales ÷ Units Sold
MarginAlso: Supply Chain / Ops
Cost of Goods Sold (COGS)
COGS = BOP Inventory + Purchases − EOP Inventory (all at cost)
SalesAlso: Analytics
Average Dollar Sales (ADS) per Transaction
ADS = Net Sales ÷ Number of Transactions
SalesAlso: Analytics
Return Rate %
Return Rate % = Return Units ÷ Gross Sales Units × 100
GrowthAlso: Analytics
Comparable Store Sales (Comps) %
Comps % = (Current Period Sales − Prior Period Same-Store Sales) ÷ Prior × 100
Productivity
Working Capital Tied in Inventory
Working Capital = Average Inventory at Cost × (Days Held ÷ 365)
Margin
EBITDA Impact of Markdown
EBITDA Hit = Incremental Markdown $ × (1 − Tax Shield)
Sales
Gross-to-Net Sales
Net Sales = Gross Sales − Returns − Allowances
Executive Cheatsheet
Retail Math Cheatsheet for Executives
A role-specific PDF with the formulas executives use day-to-day — equations, worked apparel examples, and the adjacent formulas you work with. Work email only — no sales calls triggered.
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Executives run this math in RetailNorthstar — live.
One connected system from plan to allocation. No more reconciling the spreadsheet, the BI dashboard, and the buy file against each other.