BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -A markdown is a permanent price decrease for a product at the end of its lifecycle (or “seasonality”). Markdowns are used to temporarily increase demand for low-demand products, ideally long enough to sell through all stock. Markdowns are caused by excess inventory at the end of a selling season.

Detailed explanation-2: -Markup prices can be defined as the increase (by percentage) in the price of a product based on its original cost. Markdown prices are the rate (markdown percentage) decrease in the selling price of a product from its original selling price. The term discount is a more common term to describe markdown prices.

Detailed explanation-3: -What Is a Markdown? A markdown in finance is the difference between the highest current bid price among dealers in the market for a security and the lower price that a dealer charges a customer. Dealers will sometimes offer lower prices to stimulate trading; the idea is to make up for the losses with extra commissions.

Detailed explanation-4: -Markdown Works [Example] For instance, lets say broker X sells shares of ABC stock to buyers at a rate of $20 per share. In the broker market, the original price of these shares was $40 per share. In this case, the broker will markdown on the shares when he sales will be; $20-$40 =-$20.