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. The prices from lowest to highest that are carried within a merchandise category
Debt Equity Ratio Formula
Late Markdowns
Profit and Loss Statement (P&L Statement)
Pricing Strategies: Price Ranges
2. Costs involved in running the business
Original Price
Markup
Current Ratio
Operating Expenses
3. 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
The Cost Method
Return on Net Worth (RONW) Formula
Buying Errors
Current Assets
4. Cash Received by the retailer-cash leaving the retailer
Current Ratio (CR) Formula
Cash Flow Formula
Gross Margin
Adage of Profitability for Retailers
5. Current Liabilites/ Net Worth
5 Steps of Retail Inventory Method
Pricing Strategies: Price Lining
Acid Test or Quick Ratio (QR) Formula
Debt Equity Ratio Formula
6. 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
Cumulative Markup % Formula
Balance Sheet
Net Profit
7. Short time - like 1 or 2 day sales
GMROII (Gross Margin Return on Inventory Investment)
Temporary Price Reduction
Off-Price Markdowns
Profit
8. Sales for the period/ average inventory
Expense Ratio
Reasons for taking Markdowns
Turnover Rate Formula
Liabilities
9. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Cumulative Markup
Forced Obsolescence
Clearance Markdowns
Promotional Markdown
10. 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
LIFO (last in - first out)
Accounts Receivable (AR)
GMROII (Gross Margin Return on Inventory Investment)
FIFO (First in - First out)
11. Amount of markdown usually less - take the loss early will be easier - strengthen goodwill - replenish stock in lower price lines - leads to higher stock turnover - higher likelihood merchandise will sell in a timely manner
New Price
Markup % of Retail Formula
Accounts Receivable (AR)
Early Markdowns
12. 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.
Gross Margin Return on Inventory Investment-GMROI Formula
Buying Errors
Pricing Depends on 2 factors
Promotional Markdown
13. Liabilities+ Owner's equity or net worth
Selling Price Formula
Markup % of Cost Formula
Late Markdowns
Assets Formula
14. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Planned Initial Markup % Formula
Net Sales
The Cost Method
Pricing Depends on 2 factors
15. The retailers financial condition at a specific point in time
Balance Sheet
Cost Complement Formula
Pricing Strategies: Price Lining
Accounts Receivable (AR)
16. Promotional markdown that involves selling at or near cost for promotional purposes
Loss-Leader
Turnover Rate Formula
Promotion Errors
Cumulative Markup % Formula
17. Ranges of prices that appeals for a particular group of consumers
Pricing Strategies: Price Lining
Markdown Percentage Formula
Current Ratio (CR) Formula
Pricing Strategies: Price Zones
18. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Markdown optimization
Uncontrollable Errors
Profit
Accounts Receivable (AR)
19. Usually lower than original - but held for longer period
Promotional Markdown
Debt Equity Ratio Formula
Profit Margin Analysis Formula
Regular Price
20. 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
Reasons for taking Markdowns
Financial Leverage Ratio
Off-Price Markdown Percentage Formula
Clearance Markdowns
21. Cost Price/ (100%-markup %)
Initial Markup (IMU)
5 Steps of Retail Inventory Method
Retail Price Formula
Return on Assets
22. Financial debts incurred by a retailer
Liabilities
Dollar Markdown Formula
Reasons for taking Markdowns
Markdown
23. Net Profit/ Net Sales
Expense Ratio Formula
Dollar Markdown Formula
Profit Margin Analysis Formula
Off-Price Markdown Percentage Formula
24. 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.
Debt Equity Ratio
Fixed Liabilities
Markup % of Retail Formula
Expense Ratio
25. One that is just enough to move the goods
Profit Margin
Planned Initial Markup % Formula
Retail Inventory Method
Ideal Markdown
26. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Net Sales
Pricing Strategies: Price Lining
New Price
Pricing Strategies
27. First price or Manufacturers suggestet Retal Price (MSRP)
Original Price
Clearance Markdowns
Cost of Goods Sold (COGS) Formula
Debt Equity Ratio Formula
28. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Return on Assets
Expense Ratio Formula
Off-Price Markdown Percentage Formula
Original Price
29. The cost of merchandise that was sold (including the method that was used to determine cost)
Pricing Depends on 2 factors
Financial Leverage Ratio Formula
Assets
Cost of Goods Sold
30. Original Retail price- markdown selling price
Current Assets
Dollar Markdown Formula
Return on Sales
Financial Leverage Ratio
31. Improper displays - merchandise returns due to high pressure selling
Pricing Errors
Debt Equity Ratio Formula
Promotion Errors
Selling Price Formula
32. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented.
Markdown Optimization
Cost of Goods Sold (COGS) Formula
Reasons for taking Markdowns
Net Profit
33. Price Lining - price zones - price ranges
Markdown Cancellation ($) Formula
Pricing Strategies
Acid Test or Quick Ratio (QR) Formula
Dollar Markdown Formula
34. 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
Reasons for taking Markdowns
Cumulative Markup
Return on Net Worth
Profit Margin
35. 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
Ideal Markdown
Temporary Price Reduction
Early Markdowns
5 Steps of Retail Inventory Method
36. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Markdown Percentage
Acid Test or Quick Ratio (QR) Formula
Fixed Assets
Return on Net Worth
37. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
Financial Leverage Ratio
Off-Price Markdown Percentage Formula
5 Steps of Retail Inventory Method
Current Ratio (CR) Formula
38. Net Profit After Taxes/ Net Worth
Pricing Depends on 2 factors
Accounts Receivable (AR)
Markdown
Return on Net Worth (RONW) Formula
39. 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
Dollar Markdown Formula
Net Profit
Fixed Liabilities
LIFO (last in - first out)
40. 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
Forced Obsolescence
Current Ratio
Debt Equity Ratio
Late Markdowns
41. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Return on Net Worth
Fixed Assets
Return on Assets (ROA) Formul
Off-Price Markdown Percentage Formula
42. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)
Markdown Cancellation ($) Formula
Acid test or Quick Ratio
Off-Price Markdowns
Depreciation
43. Net dollar markdown/ net dollar selling price
Promotion Errors
Markdown Percentage Formula
Balance Sheet
Markdown Cancellation ($) Formula
44. What the retailer owns in monetary value
Return on Assets (ROA) Formul
Cash Flow Formula
Current Ratio
Assets
45. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Fixed Liabilities
Operating Expenses
Retail Price Formula
Promotional Markdown
46. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
Net Sales
Gross Margin Return on Inventory Investment-GMROI Formula
Net Profit
Initial Markup (IMU)
47. Total Assets/ Net Worth
Financial Leverage Ratio Formula
Pricing Strategies: Price Zones
Pricing Strategies
Original Price
48. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Balance Sheet
Net Profit
Markup % of Retail Formula
Profit Margin Analysis Formula
49. (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%
Planned Initial Markup % Formula
Markdown Optimization
Profit
Markdown Percentage
50. Total Expenses/ Net Sales
Return on Assets
Expense Ratio Formula
Financial Leverage Ratio
Acid Test or Quick Ratio (QR) Formula