Enter the cost of goods available for sale ($) and the retail value of goods available for sale ($) into the Calculator. The calculator will evaluate the Cost To Retail Ratio.

## Cost To Retail Ratio Formula

C:R = COGS / RVG * 100

Variables:

• C:R is the Cost To Retail Ratio (%)
• COGS is the cost of goods available for sale ($) • RVG is the retail value of goods available for sale ($)

To calculate the Cost To Retail Ratio, divide the cost of goods available for sale by the retail value of those goods.

## How to Calculate Cost To Retail Ratio?

The following steps outline how to calculate the Cost To Retail Ratio.

1. First, determine the cost of goods available for sale ($). 2. Next, determine the retail value of goods available for sale ($).
3. Next, gather the formula from above = C:R = COGS / RVG * 100.
4. Finally, calculate the Cost To Retail Ratio.
5. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem :

Use the following variables as an example problem to test your knowledge.

cost of goods available for sale ($) = 5000 retail value of goods available for sale ($) = 23400

## FAQ Section

What is the significance of the Cost To Retail Ratio in business?

The Cost To Retail Ratio is significant in business as it helps determine the efficiency of a company’s purchasing and pricing strategies. A lower ratio indicates that the company is able to purchase goods at a lower cost relative to their retail value, which can lead to higher profit margins.

How can the Cost To Retail Ratio impact pricing strategies?

The Cost To Retail Ratio can impact pricing strategies by providing insights into how much markup a business can apply while remaining competitive. Understanding this ratio helps businesses set prices that are both attractive to consumers and profitable for the company.

Can the Cost To Retail Ratio vary by industry?

Yes, the Cost To Retail Ratio can vary significantly by industry due to differences in markups, cost structures, and competitive landscapes. Industries with higher value-added products or services may exhibit higher ratios compared to those dealing in commodities or low-margin goods.

Why is it important to calculate the Cost To Retail Ratio accurately?

Accurately calculating the Cost To Retail Ratio is important because it directly affects decision-making related to inventory purchasing, pricing, and sales strategies. An inaccurate ratio could lead to pricing errors, reduced profit margins, and competitive disadvantages.