Development of a Draft Balanced Scorecard for Zara by Marvin Mertens

Author:Marvin Mertens [Mertens, Marvin]
Language: eng
Format: azw3
Tags: Performance Measurement, Performance Measurement and Management, Stakeholder Analysis, Zara, Strategy Map, Balanced Scorecard
ISBN: 9783668002128
Publisher: GRIN Publishing
Published: 2015-06-26T04:00:00+00:00

Net sales

Net sales are computed by taking a firm’s gross sales and subtracting returns, allowances for damaged and stolen goods, as well as product discounts (Rogers, 2015). The measure thus provides a more accurate picture of a firm’s revenue situation than gross sales by adjusting for product returns. These are a particularly serious problem in the fashion industry, for example because shoppers might take home a garment in two sizes only to return at least one of them and thereby generate handling costs for the retailer. Also, net sales explicitly adjust for product discounts, which is important in the case of Zara since a main driver of the firm’s profitability is its ability to sell its products at full price (Ferdows et al., 2004). Again, this KPI is frequently used among fast fashion retailers and thus suitable for cross-organisational comparisons.

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