Marketing Mathematics

Marketing Mathematics
“A Basic Skill Needed in Life and in

Any Business”
What Kind of
Mathematics
Do We Use
in
Business???
 Addition
 Subtraction
 Multiplication
 Division
 Fractions
 Percentages
 Addition
 Subtraction
 Multiplication
 Division
 Fractions
 Percentages
 It’s Not Calculus!!
 Addition
 Subtraction
 Multiplication
 Division
 Fractions
 Percentages
How Do We
Use
Mathematics
in
Business???
Identify situations in
which the ability to add
& subtract are required:
Discussion
which the ability to add
& subtract are required:
 Cashier’s daily balance
 Daily sales summary
 Customer accounts
 Sales checks
 Counting $$$
 Inventory
which the ability to
multiply & divide are
required:
Discussion
multiply & divide are
required:
 Bulk pricing
 Average sales
 Extensions
 Ad time purchases
 Payment plans
calculate percents &
fractions are required:
Discussion
calculate percents &
fractions are required:
 Time cards
 Discounts
 Markup
 Sales tax calculations

Be Able to
Complete a
Standard
“Sales Check”
to 100%
Accuracy
 Be able to Complete a
Standard Sales Check to 100%
accuracy
 Use of the sales receipt
 Customer receipt
 To determine commissions
 Planning future purchases
 Market research
 Billing information
 Calculating of taxes
 Delivery information
accuracy
 Types of sales transactions
 Cash/Check
 Charge
 Layaway
 Discount
 Cash on Delivery “COD”
 Returns/Exchanges
accuracy
 Types of sales transactions
 Cash/Check
 Charge
 Layaway
 Discounted
 Cash on Delivery “COD”
 Returns/Exchanges WHY???
accuracy
 Rules to completing a sales
check
 Fill in all necessary
information
 Be legible & accurate
 Use in correct order

accuracy
 Making Change
 The “Count-Back Method”
• Announce the $$$ amount

of the sale
• Place bill on register plate
• Repeat the amount
tendered
accuracy
 Making Change (Continued)
• Count the amount out of

the register to yourself
• . . . then to the customer
• Place money in the
register properly
accuracy
• Place the receipt in the

customer’s hand
• Thank the customer
 Use the fewest bills & coins
possible!!!
 Be able to Complete a Standard
Sales Check to 100% accuracy
 Avoiding mistakes
• Remain calm/focused
• Be willing to start over
• Do one transaction at a time
• Never put bill in register
until finished
• Enter information carefully
accuracy
 The Cash Drawer:
accuracy
 The Cash Drawer:
 Bills are placed flat and
facing the same direction
 Fifties and above are placed
under the register drawer
 Maintain an adequate change
fund
 Ask for change in advance
accuracy
 Be able to complete a charge
sales transaction
 Very similar to a regular
sales check
 Add customer account
number and authorization
code
 Be able to complete a charge
sales transaction (Continued)
 First check the expiration date
 Authorize account
 Compare signature on receipt
w/ signature on card’s back

 Is everything legible?
 Return the card to customer

accuracy
 Be able to complete a check
transaction
 More difficult
 Just like cash, but fraudulent

checks are more plentiful
“I can’t be overdrawn, I’ve
still got checks in my
checkbook.”
accuracy
transaction (Continued)
 Your job is to prevent
 Checks are called “sales

drafts.” Drafts are orders to
pay. In this case, you’re
ordering your bank to pay.
 Checks are “negotiable
instruments” meaning that they

are transferable.
 To transfer a check, it must be
endorsed
 There are special endorsements
• “For Deposit Only”

• “Pay to the Order”
 Do not accept “Two-Party”
checks
 Check for the correct
information on the check

 Compare signature on check
w/ what is on their picture ID.

 Remember, if they can check
your merchandise, you can
check their checks.
 Be able to conduct a customer
return transaction
 Why do stores hate to do
return transactions?
return transaction
 Why do stores hate to do
return transactions?
Because money is
leaving the store
instead of coming in!!!
return transaction (Continued)
 Do store have to do returns?
 Why do stores do returns?

 Do store have to do returns?
No
 Why do stores do returns?
Trust & loyalty
 What other options are
available to a salesperson?
 What other options are
available to a salesperson?
• Exchange
• Credit to their account
• Gift certificate
 Types of exchanges:
• Even Exchange
• Uneven Exchange
 Return Polices:
• Wrapping?
• Length of time?
• Damage?
• Receipt?
• Sale item?
See examples next
 Return Polices:
• Dress shirt is unwrapped?

• Kept for one month?
• Bottom of shoes scuffed?
• It was a gift, no receipt?
• 50% off sale, but . . . ?
Role Play
 What business forms must be
changed:
• Inventory
• Cash register balance
• Commissions
• Income statements
 Be able to operate a
computerized cash register
 Cash register purposes:
• Calculate accurately
• Provide customer receipt
• Provide records for store
• Display work to customer
• Speed purchase
• Cash security
• Inventory records
• Merchandise ordering
 Common cash register keys:
• Operator’s key
– Locks
– Initiate reads
“X” read
“Z” read
– Indicates function
• Keyboard:
– Receipt
– Receipt feed
– Journal feed
– Date/No.
– Numeric keys
– Dept. keys
• Keyboard: Continued
– #/NS
– TX/M
– “X”
– Item Corr.
– “C”
– “Retn MDSE”
– “R/A”
• Keyboard: Continued
– #/NS No Sale
– TX/M Tax Mod.
– “X” Extension
– Item Corr. Corrections
– “C” Clear
– “Retn MDSE” Returns
– “R/A” Account Returns
 Types of Cash Registers:
Continued
• Keyboard:
– “PO”
– “Vali Date”
– “Chg.”
– “ST”
– “Doll Disc”
– “AT/TL”
 Types of Cash Registers:
Continued
• Keyboard:
– “PO” Paid Out
– “Vali Date” Validate
– “Chg.” Charge sale
– “ST” Subtotal
– “Doll Disc” Discount
– “AT/TL” Amt Tendered
 Be able to operate a computerized cash
register
 Common cash register types:
• Manual Key Entry
– Numeric keys
– Function keys
• Optical Scanning
– Uses wand to “read”
– UPC (Universal Product Codes)
 Be able to verify a “Change Fund”:
• A change fund is the amount of
$$$ an operator starts the day
with
• Amounts vary between $100
and $150 depending on
customer habits & sales volume
• The make-up depends on the
prices charged by the store
 Be able to verify a “Change Fund”:
Continued
• Verify your change fund at the
start of each day
• “Buy Change” during the day
in advance of running out.
– Pennies = 50 = $ .50
– Nickels = 40 = $ 2.00
– Dimes = 50 = $ 5.00
– Quarters= 40 = $10.00
– Dollars = 25 = $25.00
 Be able to “Tally” the day’s sales &
“balance” the register at day’s end
• End the day by totaling the
coin, currency, charge slips, &
checks in the register
• Subtract the change fund
• Make allowances for returns,
corrections, & paid out
transactions
 Be able to “Tally” the day’s sales &
“balance” the register at day’s end Continued
• Compare the “tape” of the day’s
transactions with your totals
• Record “overage”
or “underages”
• Turn in “Tally”
• Make change fund for tomorrow
Be able to
describe the role
of banks in our
business’s
operations
 Be able to describe the role of
banks in our business’s operations
 Homework:
1. Read Chapter 12,

Pages 194 – 205
2. Read Chapters 29 & 30,
Pages 512 – 539

 Be able to describe the role of banks
in our business’s operations
 Role of banks:
 Security
 Money Management.
 Money substitutes:
 Bank checks
 Traveler’s checks
 Drafts (bank to bank checks)
 Money orders
 Cashier’s checks
 Debit cards
 Credit cards (Store cards vs. Bank cards)
 Loans
 Other services:
 Deposit boxes
 Counseling
• Business
• Personal
• Real estate/Stocks
& Bonds
 Community service
 Accounts:
 Savings
 Checking
 Terms:
 Interest
 Payee
 Drawer
 Drawee
 Accounts:
 Savings
 Checking
 Terms:
 Interest Income
 Payee To Whom
 Drawer Writer of the check
 Drawee The bank
 Be able to describe the
role of banks in our
business’s operations
 Specialty terms:
 Signature Authorization
Card
 Taxpayer ID
 Accounts:
 Savings
 Saving Account Basics:
 Why do people save money?

(& others don’t)
• ________________
• ________________
• ________________
• ________________
 Accounts:
 Savings
 Why do people save money?
• For major purchases

• Emergencies
• Retirement
• ???
 Accounts:
 Savings
 Earning Interest on Savings
• Why do we get interest

income from a bank?
– Because they let others use your
money to make them and themselves
make money.
 Accounts:
 Savings
 Earning Interest on Savings
• Start early
• Save at least 10% of gross
income
 Accounts:
 Savings
 Saving Concepts
• Rate of Return – the percentage

of increase in the value of your
savings.
• Simple vs. Compounding –
“Interest earning income on
interest income.”
 Accounts:
 Savings
 Types of Savings Accounts
• Regular Savings Accounts

• Certificates of Deposit (CDs)
– Maturity Dates
• Money Market Funds
– Also called Mutual Funds
 Accounts:
 Savings
 Pros of Saving Accounts
• Insurance through the FDIC

– Federal Deposit Insurance Corporation
– Up to ??? K
• Liquidity
 Accounts:
 Savings
 Cons of Saving Accounts
• Low Rates of Return

– Very little risk
• Inflation Risk
– 2% return; 4% inflation? Ouch!!!
• Fees
– Min. balance, Account Fees, Taxes
banks in our business’ operations
 Accounts:
 Checking
 Homework:
1. Read Chap 29, pages 512 – 518
 Accounts:
 Checking
 Checking Account Basics:
 A check is a written order directing a
bank to pay money on demand to the

person/company named
 Once the bank pays the money, the
check is “canceled” meaning the
debt has been paid.
 Accounts:
 Checking
 A check can be “endorsed” meaning
sign over to another party.

 Society is moving more in the
direction of “debit cards” allowing

funds to be removed from another
person’s account immediately.
 Accounts:
 Checking
 Types of Accounts:
• Regular Checking – for

customers who write only a few
checks a month & do not keep
high balances. Allows for
“ATMS” and “Direct Deposit.”
 Accounts:
 Checking
• Interest Bearing – Allows the

customer to earn interest income
from the funds left in the
checking account
 Accounts:
 Checking
• Joint Account – Allows two or

more people to write checks on
the account.
 Accounts:
 Checking
 Account Security
• Signature Card
 Accounts:
 Checking
 Account Services
• Overdraft Protection is for when

the client is “overdrawn.”
• “Stop Payment”
• “Online Banking”
• “Debit Cards”
 Accounts:
 Checking
 Keeping Track of Financial
Transactions:
 Writing a Check
• Parts of a Check
– See diagram next page
• Check Register – a log of
customer transactions
 Accounts:
 Checking
 Parts of a Check
 Accounts:
 Checking
 Making Deposits
 Deposit Slips
 Keep Your Receipts
 Use the ATM
 Watch for Endorsements
• For Deposit Only

 Accounts:
 Checking
 Reconciling Your Bank Statement
 Confirming that your records agree
with the bank’s records.

 Balancing Your Checkbook
 Outstanding Checks & Deposits
 Fees (Bank and ATM)
 Interest
 Be Able to Manage Your
Personal Finances
 Making Financial Decisions
 Homework:
1. Read Chap 28, pages 496 - 507
2. Complete the Crossword Puzzle Provided
3. On the Puzzle sheet, answer any one
“Critical Thinking” question from the text.

Use complete sentences. Summarize the
question in the first sentence.
Personal Finances
 Personal Financial Planning means
spending, saving, & investing your

money so you can enjoy the kind of
lifestyle you want.
 Financial Goals are Critical – buy a
car, save for college, socialize, pay

your bills, A plan to retire, etc.
Personal Finances
 Steps to Financial Planning:
1. Determine your financial
situation
– List your savings
– Monthly income
– Monthly expenses
– Debts
Personal Finances
2. Determine your financial goals
– Spend or save?
– Wants & needs?
– Work now or later?
– Education?
Personal Finances
3. Identify possible courses
of action
– “There’s more than one way to skin
a cat.”
4. Evaluate your alternatives
– Gather needed information
– Consider pros, cons, & risk
Personal Finances
5. Implement your financial
action plan
– Identify your objectives
– Determine needed tactics
6. Review & revise your plan
– Needs & situations change
– Update your plan as needed
Personal Finances
 Sources of Financial Information:
• Internet research of company
information (Annual Reports).
• Publications:
– Business Week
– Wall Street Journal
– The New York Times
– Financial Times
Personal Finances
 Understanding Risk:
• Every financial decision has a certain
amount or risk. You must be able to
accept possible losses.
• Types of Risk:
– Inflation: a general increase in the cost of
goods & services
– Interest Rate: Interest rates rise & fall which
will effect your cost & return.
Personal Finances
• Types of Risk (Cont.)
– Income Risk: Your income may rise & fall
over time. You could lose a job. Your or a
family member’s health may fail for a time,
or you could get a raise!
Personal Finances
– Personal Risk: Don’t put yourself in a risky
situation unnecessarily for minimal benefit.
For example, driving for 24 hours straight to
save plane fare
Personal Finances
– Liquidity Risk: The ability to withdraw
savings or investments in a timely manner
without lose of value.
Personal Finances
 The Importance of Budgeting
 Money Management is a method of planning
to get the most from one’s money (“Getting the
biggest bang for the buck”):
• A budget is a plan for using your income
in a way that best meets your wants &
needs.
– A good budget will help you
set priorities for spending &
saving and keep track of
your money?
Personal Finances
 Preparing a Budget
1. Set your financial goals
- What do I want to accomplish monthly,
yearly, for the next five years?
- What’s important to me?
- Are my goals practical?
2. Estimate your income
- Actual money you earn
- Gross pay, net pay,& deductions
 Be Able to Manage Your Personal Finances
3. Budget for unexpected expenses & savings
- Unexpected expenses: medical, damages
- Save for major purchases &
future needs (college?)
4. Budget for fixed expenses
- Fixed expenses (necessary)
such as rent, insurance,
car loans, food, etc.
- Often stay the same over time
- Allow for depreciation expense
5. Budget for variable expenses
- Variable expenses change and can be controlled
more readily. They include dining out, phone
charges, entertainment, gifts, etc. Often called
discretionary.
6. Record what you spend
- Determine the difference
between actual expenses
vs. budgeted expenses
- Surpluses & deficits
7. Review Spending & Saving Patterns
- Budgeting is a continual process. Review each
month & consider changes.

Marketing Mathematics

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Marketing Mathematics

“A Basic Skill Needed in Life and in

 Sales tax calculations

 Planning future purchases

 Cash on Delivery “COD”

 Cash on Delivery “COD”

 Use in correct order

• Announce the $$$ amount

• Count the amount out of

• Place the receipt in the

 Compare signature on receipt

w/ signature on card’s back

 Return the card to customer

 Just like cash, but fraudulent

 Checks are called “sales

instruments” meaning that they

• “For Deposit Only”

information on the check

w/ what is on their picture ID.

 Why do stores do returns?

• Dress shirt is unwrapped?

1. Read Chapter 12,

Pages 512 – 539

 Drafts (bank to bank checks)

 Credit cards (Store cards vs. Bank cards)

 Saving Account Basics:

 Why do people save money?

 Saving Account Basics:

 Why do people save money?

• For major purchases

 Saving Account Basics:

 Earning Interest on Savings

• Why do we get interest

 Saving Account Basics:

 Earning Interest on Savings

 Saving Account Basics:

• Rate of Return – the percentage

 Saving Account Basics:

 Types of Savings Accounts

• Regular Savings Accounts

 Saving Account Basics:

 Pros of Saving Accounts

• Insurance through the FDIC

 Saving Account Basics:

 Cons of Saving Accounts

• Low Rates of Return

 Checking Account Basics:

 A check is a written order directing a

bank to pay money on demand to the

 Checking Account Basics:

 A check can be “endorsed” meaning

sign over to another party.

direction of “debit cards” allowing

 Checking Account Basics:

• Regular Checking – for

 Checking Account Basics:

• Interest Bearing – Allows the

 Checking Account Basics:

• Joint Account – Allows two or

 Checking Account Basics:

 Checking Account Basics:

• Overdraft Protection is for when

 Keeping Track of Financial