The following reports show the Cost of Goods (COG)% and Gross Profit (GP% in Pilot:

• Sales Breakdown Report

• Variance by Category Report

• Simple GP Report

• Variance Trend Report for GP Percentage

Sales Break Down: 

1. Actual

2. Potential

1. 1.  In order to calculate Actual cog we need the values of four variables. They are; 
   

• Opening Stock (in wholesale dollars)

• Closing Stock (in wholesale dollars)

• Purchases (in wholesale dollars)

• Retail Sales

We calculate our actual cog in dollars (CoGs) as: wholesale value of opening stock + wholesale value of purchases – wholesale value of closing stock

To calculate the cog% we use the following equation: cog$/sales*100

Example from Pilot:

First: To find opening and closing stock we have to take figures from Stock on Hand Module. Select a date range. For eg ; 20 Feb – 27 Feb.  View the Stock on Hand Summary by Product Category Report.

The wholesale dollar value of stock on 20 Feb will be opening stock

The wholesale dollar value of stock on 27 Feb will be closing stock

Second:  In order to find the wholesale value of the Purchases for that period, we run a report from 20 Feb to 27 Feb. View the Stock received report. It will show the wholesale value of the purchases.

Third, in order to find the retail sales value, you can pull it from two different locations:

• Sales summary page.  NOTE:  If you have excluded any sub-categories from the report, their sales will not he included in the sales figures on the sales summary page.

• Modify sales under the sales import button.  This figure will always be a complete figure no matter what you have excluded from the report.  Select the appropriate day of sales and make sure to pull the sales figures from each location you have imported sales to.

Now that we have all of the values we need, we can apply the formula above to do the calculation.

• NOTE:  GP% is the inverse of COG% so; Actual GP% = 100% – Actual COG%

To calculate Potential or Ideal GP% Pilot uses the following formula:

Potential GP% = ((Total retail Sales - Wholesale Cost of Sales) / Total Sales) * 100

Potential COG% is the inverse of the potential i.e. Potential COG% = 100% - Potential GP%

One other equation that will calculate the Potential COG% is:  (Wholesale Cost of Sales / Total Retail Sales) * 100%

Below is the calculation and explanation with figures ;

In  Sales Breakdown Report we can see the GP % and COG % for entire venue.  There are two columns in Gross Margin Analysis Table; Without Variance and With Variance. Without Variance is Potential % and With Variance is Actual %. 

Our figures are as follows:

Cash Sales for Stocktaked Items = $47,041

Cost of Sales (exclusive of stocktaked item):

• $8,582.4 (Without Variance) 

• $8,253.7(With Variance)

Potential COG %: ($8,582.4 / $47,041)*100% = 18.2%

Actual COG %: ($8,253.7 / $47,041)*100% = 17.5%

Potential GP %: 100% – 18.2% = 81.8%

Actual GP %: 100% – 17.5% = 82.5 %

Variance By Category Report:  We can change the settings in the System Options to see display either GP % or COG %  of each category of products as per our convenience. Read the explanation of the calculation in Page 1 to find the figures of Opening stock , Closing Stock and Purchases.  To get sales for individual categories, you will need to do the following:

• View the Gross Margin Summary Report of the same date range and calculate the total sales of the categories from each sales location.

• View the POS consolidated sales report of the same date range and pull the total sales values for your category from each sales location.

Our Actual wholesale value of COG is calculated as: Wholesale value of Opening Stock + Wholesale value of Purchases – Wholesale value of Closing Stock

So, our Actual wholesale value of  Cost of Goods will amount to $127. 

For this example, our Sales are $506.

Actual COG%; ($127/$506)*100% = 25%

Actual GP%; 100% – 25% = 75 % or ($506-$127)$506100% = 75%

Now in order to calculate the Potential %, check the Gross Margin Detail Report to calculate your Total Cost of Sales by multiplying the Units sold with Cost per unit of the products. 

For example: 

Product 1: 50units * $1.65/unit = $82.5 and 

Product 2: 1unit * $1.42/unit = $1.42.

Total Cost of Sales of the two products = $83.92

Potential COG%; ($83.92 / $506)*100 = 17%

Actual GP %; 100% – 17% = 83% or ($506 – $83.92) / $506*100% = 83%

In Simple GP Report we can calculate our Theoretical GP%. First we will calculate the COG% by using the following formula; Cost per Unit / Retail Price * 100. 

Cost per Unit = $3.93

Retail Price = $13

COG% ; 3.93 / 13 * 100 = 30.3%

Theoretical GP% ; 100 – 30.3 = 69.7%

In Variance Trend Report for GP Percentage we are able to see the trend of the Potential and Actual Gross profit% of the audit date range selected.