Assuming no sales for the period, calculation would be as follows: Markdowns included in cost to retail ratio Cost Retail Purchases 10 20 Markdowns 8 Ending inventory at retail 12 Cost to retail ratio = 10/12=83.3% Ending inventory=12*83.3%=10 Markdowns not included in the ratio Cost to retail=10/20=0.5 Ending inventory=12*0.5=6.