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. Examines the financial health of a retailer - as one of the best indicators of having too much debt in relationship to net worth. Comparres the money that vendors or banks are risking with the money that the retail owners have invested in their opera
Return on Assets
Pricing Strategies: Price Lining
Debt Equity Ratio
Pricing Depends on 2 factors
2. (planned expenses + planned operating profit + planned stock shortages + markdowns + employee and customer discounts) / (planned net sales + stock shortages + markdowns + employee and customer discounts) x 100%
Markup
Current Liabilities
Off-Price Markdown Percentage Formula
Planned Initial Markup % Formula
3. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit
Profit and Loss Statement (P&L Statement)
Markup % of Retail Formula
Planned Initial Markup % Formula
Debt Equity Ratio
4. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Return on Assets
Selling Price Formula
Markdown optimization
Reasons for taking Markdowns
5. Current Assets/ Current Liabilities
Return on Assets (ROA) Formul
Current Ratio (CR) Formula
Buying Errors
Pricing Strategies: Price Ranges
6. Basic premise is to increase profits through more sales without an increase in inventory. Inventory is expressed in cost terms rather than cost percent - because it is related to investment dollars in gross margin - it should be expressed in cost num
GMROII (Gross Margin Return on Inventory Investment)
Cumulative Markup
Initial Markup (IMU)
Pricing Strategies: Price Ranges
7. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Cost Complement Formula
Markdown Cancellations
Current Assets
Markup % of Cost Formula
8. Cost Price/ (100%-markup %)
Late Markdowns
Price Sensitivity
Retail Price Formula
Clearance Markdowns
9. Price is changed (up or down)
Selling Price Formula
Financial Leverage Ratio Formula
New Price
Current Assets
10. Sales less cost of goods sold
Financial Leverage Ratio Formula
Depreciation
Gross Margin
GMROII (Gross Margin Return on Inventory Investment)
11. Sales for the period/ average inventory
Pricing Errors
Cost of Goods Sold
Turnover Rate Formula
Markdown
12. In the Cost Method. Merchandise most recently purchased is assumed to have been sold first. Therefore - the ending inventory reflects the items in stock for the longest period of time. Produces lowest ending inventory value and highest cost of goods
Markup % of Retail Formula
LIFO (last in - first out)
Dollar Markdown Formula
Markdown
13. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Cost of Goods Sold (COGS) Formula
Pricing Strategies: Price Zones
Profit Margin Analysis Formula
Markup % of Retail Formula
14. The awareness of the consumer to what they perceive to be the window of cost within which they will buy a particular product or service
Price Sensitivity
Debt Equity Ratio Formula
Assets Formula
Forced Obsolescence
15. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Liabilities
Fixed Assets
Clearance Markdowns
Net Profit
16. Improper displays - merchandise returns due to high pressure selling
Retail Price Formula
Cost of Goods Sold (COGS) Formula
Accounts Receivable (AR)
Promotion Errors
17. Total Assets/ Net Worth
Loss-Leader
Financial Leverage Ratio Formula
Markdown
Clearance Markdowns
18. Net Profit/ Net Sales
Acid Test or Quick Ratio (QR) Formula
Profit Margin Analysis Formula
Gross Margin
Debt Equity Ratio
19. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
Buying Errors
Pricing Strategies: Price Ranges
Initial Markup (IMU)
Inventory
20. Priced too high initially - priced too low - selling price of competitors
Clearance Markdowns
Pricing Errors
Markdown
Late Markdowns
21. First price or Manufacturers suggestet Retal Price (MSRP)
Cumulative Markup
Pricing Strategies: Price Ranges
Original Price
Promotional Markdown
22. 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
Promotional Markdown
Clearance Markdowns
Inventory
Promotion Errors
23. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented.
Assets Formula
Debt Equity Ratio Formula
FIFO (First in - First out)
Markdown Optimization
24. Based on a calculation commonly represented as a percentage - comparing the amount of inventory a retailer receives from a manufacturer or supplier against what is actually sold to the consumer
Cost Complement Formula
Temporary Price Reduction
Sell-Through Rate
Markdown Cancellations
25. 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
FIFO (First in - First out)
Cost of Goods Sold (COGS) Formula
Operating Expenses
Initial Markup (IMU)
26. Short time - like 1 or 2 day sales
Operating Expenses
Markdown Cancellations
Temporary Price Reduction
Cost Complement Formula
27. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Operating Expenses
Cumulative Markup % Formula
Fixed Assets
Early Markdowns
28. Cost + Markup
Selling Price Formula
Retail Price Formula
Markdown Percentage Formula
New Price
29. Costs involved in running the business
Retail Price Formula
Operating Expenses
Pricing Strategies
Pricing Strategies: Price Lining
30. Net Profit After Taxes/ Total Assets
Cost of Goods Sold
Cumulative Markup
Buying Errors
Return on Assets (ROA) Formul
31. The largest sum of money in current assets. Can be presented in either cost or retail terms. Should be purchased for a short period of time - as products lose monetary value over time and are subject to markdowns.
Reasons for taking Markdowns
Markup
Inventory
Markdown optimization
32. Net dollar markdown/ net dollar selling price
Markup % of Cost Formula
Late Markdowns
Return on Net Worth (RONW) Formula
Markdown Percentage Formula
33. (gross margin % x Turnover) / (100%-markup %)
Promotional Markdown
Current Assets
Pricing Errors
Gross Margin Return on Inventory Investment-GMROI Formula
34. Evaluates the managament of capital
Off-Price Markdown Percentage Formula
Pricing Depends on 2 factors
Pricing Strategies: Price Zones
Return on Sales
35. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Selling Price Formula
Financial Leverage Ratio
Markdown Percentage Formula
Off-Price Markdowns
36. The higher the ratio the quicker current liabilities can be paid. This ratio also indicates the margin of safety a retailer has on hand to cover possible shrinkages
Current Ratio
Markdown Cancellations
Loss-Leader
Markdown optimization
37. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Cost of Goods Sold (COGS) Formula
New Price
Operating Expenses
Pricing Strategies: Price Lining
38. 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.
Return on Assets
Return on Net Worth
Markdown Percentage
Promotional Markdown
39. Total Expenses/ Net Sales
5 Steps of Retail Inventory Method
Price Sensitivity
Expense Ratio Formula
Profit
40. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Promotional Markdown
Pricing Strategies: Price Lining
Profit Margin
Markdown Cancellations
41. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Profit and Loss Statement (P&L Statement)
Markup % of Retail Formula
Return on Assets
Promotion Errors
42. 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
Pricing Errors
The Cost Method
Cost Complement Formula
43. Ensures that there is enough cash to pay debts. Any time the ratio is colse to 1 - the retailer is said to be in a liquid position.
Markup
Acid test or Quick Ratio
Late Markdowns
Current Ratio
44. (Cash + Accounts Receivable) / Current Liabilities
Acid Test or Quick Ratio (QR) Formula
Retail Price Formula
Fixed Assets
Cumulative Markup
45. The weather - merchandise is shopworn - economic downturn
GMROII (Gross Margin Return on Inventory Investment)
Current Liabilities
Uncontrollable Errors
Current Assets
46. The cost of merchandise that was sold (including the method that was used to determine cost)
Pricing Strategies: Price Zones
GMROII (Gross Margin Return on Inventory Investment)
Accounts Receivable (AR)
Cost of Goods Sold
47. The number of items remaining in stock x dollar markdown
Price Sensitivity
Markdown Cancellation ($) Formula
Fixed Liabilities
Expense Ratio
48. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Markdown
Pricing Depends on 2 factors
Assets Formula
Debt Equity Ratio
49. Dollar markup ($)/ retail price ($)
Financial Leverage Ratio
Current Ratio
Markup % of Retail Formula
Operating Expenses
50. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
GMROII (Gross Margin Return on Inventory Investment)
New Price
Cost Complement Formula
Off-Price Markdown Percentage Formula