Sie sind auf Seite 1von 46

Chapter 6

Financial Strategy

McGraw-Hill/Irwin
Retailing Management, 6/e Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
6-2

Retailing Strategy

Human Resource
Retail Locations Management
Chapters 7,8 Chapter 9

Retail Market Strategy


Chapter 5
Financial Strategy
Chapter 6

Information and Customer


Distribution Relationship
Systems Management
Chapter 10 Chapter 11
6-3

Retailer Objectives

Financial – not necessarily profits, but return


on investment (ROI) – primary focus

Societal – helping to improve the world


around us

Personal – self-gratification, status, respect


6-4

Financial Tradeoff Made by Retailers to


Increase ROI

Net Profit Margin

Asset Turnover
6-5

The Strategic Profit Model:


An Overview

Profit Margin x Asset turnover = Return on assets


Net profit x Net sales (crossed out) = Net profit
Net sales (crossed out) Total assets Total assets
6-6

Components of the Strategic Profit Model


6-7

The Strategic Profit Model:


Profit Management
Sales

Gross 100
Margin
-
40 Cost of
Net Profit Goods Sold

Net Profit 15 60
Margin -

15% Total
Sales Expenses

100 25
The Strategic Profit Model:
6-8

Asset Management
Inventory

5
Sales
+
Asset 100 Current Accounts
Turnover Assets Receivable

2.5 10 4
Total Assets

40 + +
Other Current
Fixed Assets Assets

30 1
6-9

The Strategic Profit Model:


Return on Assets
Sales

Net Profit
Gross Mar 100
15 40 -
Net Profit Margin Cost Goods Sold
÷ -
15% Sales Total Exp. 60
Return on ( Net Profit
Net Sales ) 100 25
Assets Times
Inventory
37.5% Sales 5
(Net Profit
Total Assets ) Asset Turnover 100 Current Assets +
A/R
2.5 ÷ 10 4
Total Assets

( Net Sales
Total Assets ) 40 +
Fixed Assets
+
Other Cur Assets
Net Profit Net Profit Net Sales 30 1
= x
Total Assets Net Sales Total Assets
Financial Implications of Strategies Used By 6-10

a Bakery and Jewelry Store

Net Profit X Asset = Return on Assets


Margin Turnover

La Madeline Bakery 1% X 10 times = 10%

Kalame Jewelry 10% X 1 time = 10%


6-11

Income Statements for


Federated Department Stores and Costco
6-12

Profit Management Path


for Federated and Costco
6-13

Components of Gross Margin


Gross Sales
Less Returns
Less
customer
Gross Margin
allowances Net
Sales

COGS
Gross Margin for
6-14

Federated and Costco

Gross
GrossMargin
Margin == Gross
GrossMargin
Margin%
%
Net
NetSales
Sales

Federated:
Federated: $$ 6,333
6,333 == 40.5%
40.5%
$15,630
$15,630

Costco:
Costco: $$6,014
6,014 == 12.5%
12.5%
$48,107
$48,107

Why does Federated have higher margins than


Costco?
Does the higher margins mean the Federated’s is
more profitable?
6-15

Operating Expenses

Operating Expenses = Operating Expenses %


Net sales

Federated: $4,933 = 31.6%


$15,630

Costco: $4,629 = 9.6%


$48,107
6-16

Types of Retail
Operating Expenses

Selling expenses = Sales staff salaries + Commissions +


Benefits

General expenses = Rent + Utilities + Miscellaneous


expenses
Administrative expenses = Salaries of all employees other than
salespeople + Operations of buying
offices + Other administrative
expenses
6-17

Net Profit

Net Profit = Net Profit %


Net sales

Federated: $689 = 4.4%


$15,630

Costco: $882 = 1.8%


$48,107
6-18

Asset Information from


Federated’s and Costco’s Balance Sheet
6-19

Asset Management Path for


Federated and Costco
6-20

Inventory Turnover

Cost of Goods = Inventory Turnover


Average inventory

Federated: $9,297 = 3.0


$3,120

Costco: $42,093 = 11.6


$ 3,644
6-21

Inventory Turnover
6-22

Asset Turnover

Net Sales = Asset Turnover


Total Assets

Federated: $15,630 = 1.1


$14,885

Costco: $48,107 = 3.2


$15,093
6-23

Return on Assets

Net Profit Margin x Asset Turnover = Return on Assets

Federated: 4.41 x 1.05 = 4.63%


Costco: 1.83 x 3.29 = 5.84%
6-24

Strategic Profit Model Ratios


for Selected Retailers
6-25

Income Statement for Gifts to Go


6-26

Gross Margin Percent

Gross Margin = Gross Margin Percent


Net Sales

Stores: $350,000 = 50%


$700,000

GiftstoGo.com $220,000 = 50%


$440,000
6-27

Operating Expense Percent

Operating Expenses = Operating Expenses %


Net Sales

Stores: $250,000 = 35.7%


$700,000

GiftstoGo.com: $150,000 34.1%


$440,000
6-28

Net Profit Percentage

Net Profit = Net Profit Percentage


Net Sales

Stores: $ 59,800 = 8.5%


$700,000

GiftstoGo.com: $ 45,500 = 10.3%


$440,000
6-29

Balance Sheet Information for Gifts to Go


and Proposed Internet Channel
6-30

Inventory Turnover

Cost of Goods = Inventory Turnover


Average Inventory

Stores: $350,000 = 2.0


$175,000

GiftstoGo.com: $220,000 = 3.1


$ 70,000
6-31

Asset Turnover

Net Sales = Asset Turnover


Total Assets

Stores: $700,000 = 1.84


$380,000

GiftstoGo.com: $440,000 = 2.09


$211,000
6-32

Return on Assets

Net Profit Margin x Asset Turnover = Return on Assets

Stores: 8.54 x 1.84 = 15.7%


Giststgo.com 10.3 x 2.09 = 21.3%
6-33

The Strategic Profit Model

Net Sales
- Gross
Profit Management
margin
Cost of
goods sold

- Net profit
Variable
expenses Net profit

+ Total margin
expenses Net Sales
Fixed
expenses
Return on
x
assets
Inventory

+ Net sales
Asset
Accounts
receivable
Total current
assets  turnover

+ + Total assets

Other current Fixed assets


assets Asset Management
6-34

Productivity Measures

Input Measures – assess the amount of resources or


money used by the retailer to achieve outputs such as
sales

Output measures – asses the results of a retailer’s


investment decisions

Productivity measure – determines how effectively


retailers use their resource – what return they get on their
investments
6-35

Setting and Measuring Performance


Objectives

Retailers will be better able to gauge performance if it has


specific objectives in mind to compare performance.

Should include:
• numerical index of performance desired
• time frame for performance
• necessary resources to achieve objectives
6-36

Setting Objectives in Large Retail Organizations

Top Down Planning


Corporate Developmental Strategy

Category, Departments
and sales associates
implement strategy
6-37

Setting Objectives in Large Retail Organizations

Corporate

Bottom Up Planning
Buyers and Store Operation managers
managers estimate must be involved in
what they can objective setting
achieve process
6-38

Financial Performance of Retailers

Outputs - Performance Inputs Used by Retailers


• Sales • Inventory ($)
• Profits • Real Estate (sq. ft.)
• Cash flow • Employees (#)
• Growth in sales, • Overhead (Corporate
profits – Same store Staff and Expenses)
sales growth • Advertising
• Energy Costs
• MIS expenses
6-39

Productivity - Outputs/Input
• Corporate Level
– ROA = Profits/Assets (ROE = Profit/Equity)
– Overhead/Sales
• Buyers (Inventory, Pricing, Advertising)
– Gross Margin % = Gross Margin/Sales
– Inv Turnover = COGS/ Avg. Inventory (cost)
• GMROI – Gross Margin/Average Inventory
– Advertising/sales
• Stores (Real Estate, Employees)
– Sales/Square Feet inv. Shrinkage/sales
– Sales/Employee
6-40

Performance Objectives and Measures


Used by Retailers
6-41

Examples of Performance
Measures Used by Retailers
Level of Output Input Productivity
Organization (Output/Input)

Corporate Net sales Square feet of Return on assets


(measures of store space
entire corporation)
Net profits Number of Asset turnover
employees

Growth in sales, Inventory Sales per employee


profits

Advertising Sales per square


expenditures foot
Examples of Performance
6-42

Measures Used by Retailers

Level of Output Input Productivity


Organization (Output/Input)

Merchandise Net sales Inventory level Gross Margin


management Return on
(measures for a Investment (GMROI)
merchandise
category) Gross margin Markdowns Inventory turnover

Growth in sales Advertising Advertising as a


expenses percentage of
sales *

Cost of Markdown as a
merchandise percentage of
sales*

* These productivity measures are commonly expressed as an input/output.


Examples of Performance 6-43

Measures Used by Retailers


Level of Output Input Productivity
Organization (Output/Input)

Store operations Net sales Square feet of Net sales per


(measures for a selling areas square foot
store or
department Gross margin Expenses for Net sales per
within a store) utilities sales associate
or per selling hour

Growth in sales Number of sales Utility expenses as


associates a percentage of
sales *

* These productivity measures are commonly expressed as an input/output.


Illustrative Productivity Measures 6-44

Used by Retailing Organizations


Level of Output Input Productivity
Organization (Output/Input)

Corporate Net profit Owners’ equity Net profit /


(chief executive owners’ equity =
officer) return on owners’
equity

Merchandising Gross margin Inventory * Gross margin /


(merchandise inventory* =
manager and GMROI
buyer)

Store operations Net sales Square foot Net sales /


(director of stores, square foot
store manager)

*Inventory = Average inventory at cost


6-45

Benchmarks

Performance of retailer over time – retailer can


compare its recent performance to its performance in
the preceding months, quarters or years.

Performance of a retailer compared to its competitors


6-46

Sources of Information

• Balance Sheet (Snap Shot at One Time)


– Asset Management
• Income Statement (Summary Over Time)
– Margin Management
• Annual Reports/ SEC Filings
– http://
www.sec.gov/edgar/searchedgar/companyse
arch.html

Das könnte Ihnen auch gefallen