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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. Cost + Markup
Initial Markup (IMU)
Retail Inventory Method
Off-Price Markdown Percentage Formula
Selling Price Formula
2. 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.
Return on Assets (ROA) Formul
Fixed Assets
Inventory
5 Steps of Retail Inventory Method
3. Original Retail price- markdown selling price
Profit and Loss Statement (P&L Statement)
Dollar Markdown Formula
Debt Equity Ratio
Price Sensitivity
4. 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
Promotion Errors
Retail Price Formula
Late Markdowns
Debt Equity Ratio
5. 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.
Cumulative Markup
Retail Inventory Method
Expense Ratio
Gross Margin
6. Revenues received by a retailer
Return on Net Worth
Cumulative Markup % Formula
Net Sales
Cost of Goods Sold
7. Current Liabilites/ Net Worth
Debt Equity Ratio Formula
Retail Price Formula
Profit Margin Analysis Formula
Liabilities
8. The prices from lowest to highest that are carried within a merchandise category
Promotional Markdown
Pricing Strategies: Price Ranges
Retail Inventory Method
Uncontrollable Errors
9. Net Profit After Taxes/ Total Assets
Clearance Markdowns
Price Sensitivity
Return on Assets (ROA) Formul
Pricing Strategies: Price Lining
10. 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
Turnover Rate Formula
New Price
Temporary Price Reduction
11. Cost Price/ (100%-markup %)
Return on Sales
Assets Formula
Operating Expenses
Retail Price Formula
12. Total Assets/ Net Worth
Fixed Assets
Current Liabilities
Financial Leverage Ratio Formula
Net Profit
13. Short time - like 1 or 2 day sales
Pricing Errors
Temporary Price Reduction
Markdown Percentage Formula
Financial Leverage Ratio Formula
14. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Ideal Markdown
Fixed Liabilities
Uncontrollable Errors
Price Sensitivity
15. Promotional markdown that involves selling at or near cost for promotional purposes
Loss-Leader
Current Liabilities
Pricing Strategies: Price Ranges
Forced Obsolescence
16. Sales less cost of goods sold
Buying Errors
Gross Margin
Off-Price Markdown Percentage Formula
Initial Markup (IMU)
17. 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
Expense Ratio
Promotion Errors
Price Sensitivity
Retail Price Formula
18. What the retailer owns in monetary value
Pricing Strategies
Assets
Cumulative Markup
Net Profit
19. 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
Financial Leverage Ratio Formula
Reasons for taking Markdowns
The Cost Method
Markdown Cancellation ($) Formula
20. Net dollar markdown/ net dollar selling price
Balance Sheet
Pricing Strategies: Price Ranges
Markup % of Retail Formula
Markdown Percentage Formula
21. The number of items remaining in stock x dollar markdown
Gross Margin
Promotional Markdown
Markdown Cancellation ($) Formula
Net Profit
22. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Buying Errors
Uncontrollable Errors
Return on Net Worth
Acid Test or Quick Ratio (QR) Formula
23. 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.
Promotional Markdown
Cost of Goods Sold
Sell-Through Rate
Markdown Cancellation ($) Formula
24. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
The Cost Method
Cost of Goods Sold (COGS) Formula
Planned Initial Markup % Formula
Off-Price Markdowns
25. Price Lining - price zones - price ranges
Pricing Strategies
Markdown Percentage
Pricing Strategies: Price Ranges
Inventory
26. Total Expenses/ Net Sales
Markdown Optimization
Cumulative Markup
Expense Ratio Formula
Return on Assets
27. Costs involved in running the business
Operating Expenses
Accounts Receivable (AR)
Cumulative Markup
5 Steps of Retail Inventory Method
28. Improper displays - merchandise returns due to high pressure selling
Sell-Through Rate
Promotion Errors
Profit Margin Analysis Formula
Expense Ratio
29. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Regular Price
Forced Obsolescence
Current Liabilities
Debt Equity Ratio
30. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Acid Test or Quick Ratio (QR) Formula
Price Sensitivity
Pricing Strategies: Price Lining
Current Ratio
31. (gross margin % x Turnover) / (100%-markup %)
Pricing Strategies: Price Zones
Current Ratio (CR) Formula
Assets
Gross Margin Return on Inventory Investment-GMROI Formula
32. 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)
Profit
Debt Equity Ratio Formula
Retail Price Formula
33. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
LIFO (last in - first out)
Retail Price Formula
Markdown Percentage
Clearance Markdowns
34. Net Profit/ Net Sales
Pricing Depends on 2 factors
5 Steps of Retail Inventory Method
Profit Margin Analysis Formula
Acid Test or Quick Ratio (QR) Formula
35. Total Markup on all goods on hand/ retail price of all goods on hand
Cumulative Markup % Formula
Markdown
Reasons for taking Markdowns
5 Steps of Retail Inventory Method
36. Usually lower than original - but held for longer period
Current Ratio
Regular Price
Buying Errors
Assets
37. Dollar markup ($)/ retail price ($)
Dollar Markdown Formula
Markup % of Retail Formula
The Cost Method
Pricing Errors
38. Evaluates the managament of capital
Gross Margin
Return on Sales
Pricing Strategies: Price Zones
Pricing Strategies: Price Ranges
39. The cost of merchandise that was sold (including the method that was used to determine cost)
Cost of Goods Sold
Pricing Depends on 2 factors
Return on Assets
Profit and Loss Statement (P&L Statement)
40. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Cost Complement Formula
Current Ratio (CR) Formula
Loss-Leader
Assets
41. Cash Received by the retailer-cash leaving the retailer
Pricing Strategies: Price Lining
Clearance Markdowns
Expense Ratio Formula
Cash Flow Formula
42. Priced too high initially - priced too low - selling price of competitors
Depreciation
Regular Price
Pricing Errors
The Cost Method
43. 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.
Dollar Markdown Formula
Clearance Markdowns
Late Markdowns
Return on Sales
44. Current Assets/ Current Liabilities
Current Ratio (CR) Formula
Financial Leverage Ratio Formula
Early Markdowns
Fixed Assets
45. Price is changed (up or down)
Pricing Depends on 2 factors
Inventory
New Price
Cash Flow Formula
46. (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%
Clearance Markdowns
Operating Expenses
The Cost Method
Planned Initial Markup % Formula
47. 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
Cumulative Markup
Clearance Markdowns
Markdown Percentage Formula
Price Sensitivity
48. Ranges of prices that appeals for a particular group of consumers
Pricing Strategies: Price Zones
Cumulative Markup % Formula
GMROII (Gross Margin Return on Inventory Investment)
Off-Price Markdown Percentage Formula
49. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Current Ratio (CR) Formula
Early Markdowns
Current Liabilities
Cumulative Markup
50. Having the right merchandise - at the right time - for the right price - in the right place
Planned Initial Markup % Formula
Adage of Profitability for Retailers
LIFO (last in - first out)
Cost of Goods Sold (COGS) Formula