SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
Test your basic knowledge |
Retail Financials
Start Test
Study First
Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Buying Errors
Retail Inventory Method
Clearance Markdowns
Gross Margin
2. In Cost Method. Merchandise sold during a time period is assumed to be sold in the order the merchandise was received. Merchandise on hand for the longest period of time is sold first. Therefore - the ending inventory reflects the items in stock for
The Cost Method
Operating Expenses
FIFO (First in - First out)
Cost of Goods Sold
3. Total Assets/ Net Worth
Financial Leverage Ratio Formula
5 Steps of Retail Inventory Method
Gross Margin
Markdown Percentage
4. Merchandise will sell at highest price longer period of time - appear exclusive - sale of goods at regular price is not disrupted - greater amount of goods can be accumulated and then marked down.
Late Markdowns
Dollar Markdown Formula
Retail Inventory Method
Pricing Errors
5. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Cost Complement Formula
Cumulative Markup % Formula
LIFO (last in - first out)
Turnover Rate Formula
6. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Sell-Through Rate
Regular Price
Forced Obsolescence
Profit Margin Analysis Formula
7. Original Retail price- markdown selling price
Pricing Strategies: Price Lining
Dollar Markdown Formula
Pricing Strategies: Price Ranges
Cumulative Markup
8. Net Profit/ Net Sales
Turnover Rate Formula
Profit Margin Analysis Formula
Markdown Percentage
Markdown Cancellation ($) Formula
9. To make a profit buyers must set an appropriate price considering many variables and using past experience and knowledge of future trends. A markup on an item does not typically remain constant.
Markup
Promotion Errors
Financial Leverage Ratio
Liabilities
10. Assets collected within one year. Due to the widespread use of credit cards - AR for retailers has diminished with exceptions such as lay-a-way.
Turnover Rate Formula
GMROII (Gross Margin Return on Inventory Investment)
Accounts Receivable (AR)
Profit
11. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Profit
Inventory
Off-Price Markdown Percentage Formula
Reasons for taking Markdowns
12. AKA Return on Sales - Profit analysis; Indicates the extend to which retailers have the ability to cover their expenses and earn a profit - as well as a buyers ability to purchase the correct assortment of merchandise
Cumulative Markup % Formula
Gross Margin
Return on Sales
Profit Margin
13. Sales for the period/ average inventory
Turnover Rate Formula
Liabilities
Financial Leverage Ratio
Buying Errors
14. Price reduction for merchandise that has not lived up to buyers' expectations. Includes broken assortments of merchandise - merchandise lines that buyers no longer want to carry - shopworn goods - items that haven't sold because of an event beyond bu
Accounts Receivable (AR)
Return on Sales
Markup % of Cost Formula
Clearance Markdowns
15. The number of items remaining in stock x dollar markdown
Return on Assets (ROA) Formul
Markdown
Markdown Cancellation ($) Formula
Markdown Percentage
16. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Markup
Accounts Receivable (AR)
Fixed Liabilities
Retail Price Formula
17. Promotional markdown that involves selling at or near cost for promotional purposes
Loss-Leader
Markup
Operating Expenses
Early Markdowns
18. First price or Manufacturers suggestet Retal Price (MSRP)
Cost of Goods Sold
Original Price
Retail Price Formula
Retail Inventory Method
19. Price is changed (up or down)
Late Markdowns
New Price
Cost Complement Formula
Retail Inventory Method
20. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Assets
Planned Initial Markup % Formula
Fixed Assets
Expense Ratio Formula
21. Ranges of prices that appeals for a particular group of consumers
Accounts Receivable (AR)
Pricing Strategies: Price Zones
Current Liabilities
Late Markdowns
22. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
New Price
Markdown optimization
The Cost Method
LIFO (last in - first out)
23. Having the right merchandise - at the right time - for the right price - in the right place
Pricing Strategies: Price Lining
Expense Ratio Formula
Adage of Profitability for Retailers
Cumulative Markup % Formula
24. Short time - like 1 or 2 day sales
Accounts Receivable (AR)
New Price
Temporary Price Reduction
Retail Inventory Method
25. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Cost of Goods Sold
Profit
Reasons for taking Markdowns
Markdown Percentage
26. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Acid Test or Quick Ratio (QR) Formula
Retail Inventory Method
Current Liabilities
Expense Ratio Formula
27. One that is just enough to move the goods
Gross Margin
Ideal Markdown
Current Ratio (CR) Formula
Reasons for taking Markdowns
28. The retailers financial condition at a specific point in time
Net Sales
Markup
Off-Price Markdown Percentage Formula
Balance Sheet
29. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
Off-Price Markdowns
Inventory
Financial Leverage Ratio
Markdown Cancellation ($) Formula
30. Cost Price/ (100%-markup %)
Markdown Percentage Formula
GMROII (Gross Margin Return on Inventory Investment)
Retail Price Formula
Uncontrollable Errors
31. Cash Received by the retailer-cash leaving the retailer
Pricing Strategies
Gross Margin Return on Inventory Investment-GMROI Formula
Forced Obsolescence
Cash Flow Formula
32. The energizing force that fuels and sustains our economic system
Profit
Debt Equity Ratio Formula
Off-Price Markdowns
Buying Errors
33. Current Liabilites/ Net Worth
Pricing Errors
Pricing Depends on 2 factors
Net Profit
Debt Equity Ratio Formula
34. 1. Determine merchandise available for sale at both cost and retail prices. 2.Calculate the cost to retail complement or percentage relationship of the cost of merchandise to the selling price. 3. Subtract markdowns taken during the period. 4. Determ
Sell-Through Rate
Gross Margin Return on Inventory Investment-GMROI Formula
Gross Margin
5 Steps of Retail Inventory Method
35. (gross margin % x Turnover) / (100%-markup %)
Balance Sheet
Return on Net Worth (RONW) Formula
Debt Equity Ratio Formula
Gross Margin Return on Inventory Investment-GMROI Formula
36. Usually lower than original - but held for longer period
Promotion Errors
Accounts Receivable (AR)
Ideal Markdown
Regular Price
37. Current Assets/ Current Liabilities
Inventory
Pricing Strategies
Current Ratio (CR) Formula
Cumulative Markup % Formula
38. Indicates gross margin derived from the sales of merchandise and it's ability to cover operating expenses. Helps a retailer determine how much rent they should pay - what salary the owner should draw - and how much they should pay their associates.
Retail Price Formula
Gross Margin Return on Inventory Investment-GMROI Formula
Markup % of Retail Formula
Expense Ratio
39. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Regular Price
Turnover Rate Formula
Expense Ratio
Return on Net Worth
40. Temporary price reduction for a specific period of time for the express purpose of generating store traffic and sales. Prices return to original retail price at end of sale period.
Retail Price Formula
Promotional Markdown
Uncontrollable Errors
Profit Margin Analysis Formula
41. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Net Profit
Pricing Errors
Dollar Markdown Formula
Clearance Markdowns
42. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
LIFO (last in - first out)
Cost of Goods Sold (COGS) Formula
Promotional Markdown
Buying Errors
43. Total Expenses/ Net Sales
Temporary Price Reduction
Expense Ratio Formula
Selling Price Formula
Price Sensitivity
44. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Assets Formula
Markdown Cancellations
Profit Margin
Pricing Strategies: Price Ranges
45. Inventory Valuation Method where the cost to the retailer of each item purchased from a vendor is entered in the accounting system and/or placed on the merchandise item or on it's package. At times - freight charges are built into the cost. Coding of
Markdown Cancellation ($) Formula
Pricing Strategies
Retail Price Formula
The Cost Method
46. Priced too high initially - priced too low - selling price of competitors
Turnover Rate Formula
Pricing Errors
Loss-Leader
Pricing Strategies: Price Ranges
47. Net dollar markdown/ net dollar selling price
Promotional Markdown
Markdown Percentage Formula
Markdown optimization
Accounts Receivable (AR)
48. Improper displays - merchandise returns due to high pressure selling
Acid Test or Quick Ratio (QR) Formula
Planned Initial Markup % Formula
Promotion Errors
5 Steps of Retail Inventory Method
49. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)
Current Liabilities
Acid test or Quick Ratio
Depreciation
Pricing Strategies: Price Zones
50. Dollar markup ($)/ retail price ($)
Markup % of Retail Formula
Reasons for taking Markdowns
Promotional Markdown
Net Profit