By: Jeffrey f.

Quinones
John Razzhel Albia
Retailer financial strategy integrate the retailer
financial objective and goal, which retailer
develop their strategy to build a sustainable
competitive advantage to generate a desirable
profit.
• Financial – not necessarily profits, but return
on
investment (ROI) – primary focus
• Societal – helping to improve the world
around us
• Personal – self-gratification, status, respect
Strategic Profit Model is a method which
summarizing the factor that affect a firm
financial performance.
 Net Profit
(After taxes)
Net profit
margin

Net sales

Return on
assets

Net sales
Asset
turnover
Total assets
 Net Sales pertains to the total number of
peso(or dollars) received by retailer after all
refunds have been paid to customers for
returned merchandise.
 Net profit refers to the firms measure of its
overall financial performance.
 Net Profit Margin simply how much profit
(after tax) a firm earn it.
 Assets Turnover or asset turns is a financial
ratio that measures the efficiency of a
company’s use of its assets.
 Customer Return represent the value of
merchandise that customer return in the
form of purchasing merchandise.
 Gross Margin also called gross profit .It
gives the retailer a measure of how much
profit it is making on merchandise sales
without considering the expenses
associated with operating the business.
 Expenses these pertain to cost incurred in the
normal course of doing business to generate
revenues.
Assets are economic resources, such as
inventory or store fixture , owned or controlled
by the firm as a result of past transaction or
events
1.Current assets are those assets that can be
normally converted into cash with in one year.
Such as account receivable , inventory and so
on.
2. Fixed Assets
• An asset with a long term useful life that a
company uses to make it products or provide
its services. Strictly speaking, a fixed asset
that business can not want to sell it quickly.
3. Accountability each level of the business
retailer need to accountable the total expenses,
per day expenses as well as per year.
4. Store Operation Measurement the critical
assets controlled by store management are the
use by store space that how many merchandise
we need it and where we need to place it.
• Performance measurement helps determine
the progression of employees.
• Performance measurement can be used in a
wide variety of industries to measure the
progress of employees.
Quantity/Quality
One of the main objectives in performance
management in a retail environment is to
determine the ratio of quantity to quality .
Timeliness
Recording the amount of time it takes an
employee to complete a task is a vital
performance measurement tool.
Top-Down Planning
Corporate Developmental Strategy

Category, Departments and sales

associates implement strategy
 Corporate

Bottom-Up Planning
Buyers and Store
managers estimate
what they can
achieve Operation managers
must be involved in
objective setting
process
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 (e.g.,
profits)
they get on their investments (e.g., expenses)
 Level of Output Input Productivity
Organizations Output/Input
Corporate Net sales Square feet on store Return on assets
( measures for entire Net Profits space Asset Turnover
corporations) Growth in sales, profits, Number of employees. Sales per Employee
comparable store sales. Inventory Sales per square foot
Advertising
Expenditures.

Merchandize Net Sales Inventory level Gross margin return on

management (measures Gross Margin Mark downs investment(GMRO)
for merchandize Growth in sales Advertising Inventory Turnover
category) Expenses Advertising as a
Cost of merchandize percentage of sales
Markdown as percentage
of sales

Store Operation Net Sales Square feet of selling Net sales per square foot
(measures for a store or Gross Margin areas. Net sales per sales
department within store) Growth in sales Expenses for Utilities. associate or per selling
Number of sales hour
associates Utility expenses as
percentage of sales
Inventory shrinkage