MARKDOWN || BUSINESS MATHEMATICS

Summary

This video lesson delves into the concept of markdown in business, a strategy where the original selling price is reduced to match competitor prices or clear old stock. The presenter explains how to calculate markdown, which is the difference between the original and new selling prices, and introduces formulas for markdown, markdown rate, and new selling price. Examples are provided, including markdown calculations for a vehicle, a cell phone, and pants, as well as a detailed scenario involving a sweater's price changes over time. The video aims to educate entrepreneurs on pricing strategies to boost sales and clear inventory.

Takeaways

• 🔢 A markdown is the difference between the original selling price and the new selling price, used by entrepreneurs to adjust prices for various reasons.
• 💼 Markdowns help businesses compete with rivals by meeting or undercutting their prices, as illustrated in the example of a sahabila offer.
• 📉 They are also used to clear old or slow-moving stock, ensuring inventory turnover and cash flow.
• 📋 The basic formula for markdown is Original Selling Price - New Selling Price.
• 📊 Another formula to calculate markdown is Original Selling Price * Markdown Rate, which helps in planning and financial analysis.
• 📈 The formula for the new selling price is Original Selling Price - (Original Selling Price * Markdown Rate).
• 📊 The markdown rate is calculated by dividing the markdown by the original selling price and multiplying by 100 to get a percentage.
• 🚗 An example provided was a vehicle with an original price of 1,890,500, reduced to 1,512,400, resulting in a markdown of 378,100.
• 📱 Another example involved a cell phone with an original price of 28,500, discounted to 18,525, showing a markdown of 9,975.
• 👖 A pair of pants originally priced at 4,680 pesos was sold at a 25% markdown, leading to a new selling price of 3,510 after the discount.
• ⌚ A complex scenario with a wristwatch involved multiple markdowns and markups, demonstrating how price adjustments can accumulate over time.

Q & A

What is a markdown in business?

A markdown in business is the difference between the original selling price and the new selling price, often used by entrepreneurs to reduce prices to meet competitors or clear old stocks.

Why do businesses use markdowns?

Businesses use markdowns to compete with rivals' prices, to clear out old or slow-moving stock, or to attract customers by offering discounts.

What is the formula for calculating markdown?

The formula for calculating markdown is: Markdown = Original Selling Price - New Selling Price.

How do you calculate the markdown rate?

The markdown rate is calculated by dividing the markdown amount by the original selling price and then multiplying by 100 to get the percentage.

What is the formula to find the new selling price after a markdown?

The formula to find the new selling price after a markdown is: New Selling Price = Original Selling Price - Markdown.

What is the markdown amount for a vehicle originally priced at 1,890,500 pesos and sold at 1,512,400 pesos?

The markdown amount for the vehicle is 378,100 pesos.

If a cell phone originally priced at 28,500 pesos is sold for 18,525 pesos, what is the markdown amount?

The markdown amount for the cell phone is 9,975 pesos.

What is the new selling price of pants originally priced at 4,680 pesos when they are sold at a 25% markdown?

The new selling price of the pants after a 25% markdown is 3,510 pesos.

How do you calculate the markdown rate for a wristwatch sold for 4,477.50 pesos when its original price was 5,970 pesos?

The markdown rate for the wristwatch is 25%, calculated as (Markdown Amount / Original Selling Price) * 100.

What is the final selling price of an item originally priced at 40 pesos, marked up by 60%, then marked down by 25%, marked up by 30%, and finally marked down by 20%?

The final selling price of the item after all the markups and markdowns is 49.92 pesos.

What is the markdown amount for an item originally priced at 64 pesos when it is marked down by 25%?

The markdown amount for the item is 16 pesos, calculated as 64 pesos * 25%.