ratio analysis of retail stores
TRANSCRIPT
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Ratio Analysis of Retail Stores
To analyze the financial position
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MERITS
• Ratio analysis helps to compare the individual
retail stores with the bench markings of the
market or retail sector
• It helps the chain retail stores to develop
healthy competition among their stores and
making comparison among the stores
• It plays vital role in making strategic decisions
like Credit expansion, Loan availement etc
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DE - MERITS
• Comparison should be made among the
homogeneous stores and it will not be suitable
for the heterogonous stores
• Accurate data needs to be available for the
purpose of comparison, if data contains any error
it will effect the purpose of the ratio analysis
• Suitable bench markings of the sector needs to
be selected properly for the purpose of
comparison
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Financial Ratio Analysis
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Gross Profit Ratio
Gross Profit / Gross Turnover
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Net Profit Ratio
Net Profit / Net Turnover
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Inventory Turnover Ratio
Closing Stock / Gross Turnover
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Interest Coverage Ratio
Earning Before Interest & Tax / Interest Expense
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Debt Equity Ratio
Long term liabilities / Equity funds
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Return on Working Capital
Net Profit/Working Capital
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Employee cost Vs Turnover
Employee cost / Turnover
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Return on Investment
Net Profit / (Capital Funds + Loan Funds)
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Non Financial Ratio Analysis
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Revenue Per Square Meter
Total Sales Revenue / Number of Square Meters
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Revenue per Basket
Total Sales Revenue / Number of Baskets
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Revenue Per Customer
Total Sales Revenue / Number of Customers
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Revenue Per Bill
Total Sales Revenue / Number of Bills
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Profit Per Customer
Profit / Number of Customers
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Operating cost per Customer
Total Operating Cost / Number of customers
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Marketing cost per customer
Marketing cost / Number of Customers
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Revenue Per Foot Fall
Total Revenue / Total footfall
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Employees cost per square meter
Employee Cost / Number of Square Meters
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