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Test your basic knowledge |
Retail Financials
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Study First
Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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study here
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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. Improper displays - merchandise returns due to high pressure selling
Pricing Strategies: Price Zones
Current Ratio (CR) Formula
Retail Inventory Method
Promotion Errors
2. 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.
Off-Price Markdown Percentage Formula
Promotional Markdown
Operating Expenses
LIFO (last in - first out)
3. Liabilities+ Owner's equity or net worth
Assets Formula
Price Sensitivity
Regular Price
Late Markdowns
4. (gross margin % x Turnover) / (100%-markup %)
Pricing Strategies: Price Lining
Gross Margin Return on Inventory Investment-GMROI Formula
Markup % of Cost Formula
Return on Net Worth (RONW) Formula
5. Cost + Markup
Selling Price Formula
Price Sensitivity
Markdown Cancellation ($) Formula
Forced Obsolescence
6. Short time - like 1 or 2 day sales
Debt Equity Ratio
Financial Leverage Ratio
Profit and Loss Statement (P&L Statement)
Temporary Price Reduction
7. The cost of merchandise that was sold (including the method that was used to determine cost)
Cost of Goods Sold
Accounts Receivable (AR)
Cumulative Markup
Debt Equity Ratio Formula
8. Evaluates the managament of capital
Return on Sales
Debt Equity Ratio Formula
Profit
Operating Expenses
9. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Return on Net Worth (RONW) Formula
Pricing Strategies: Price Zones
FIFO (First in - First out)
Markdown optimization
10. Price is changed (up or down)
Expense Ratio
New Price
Pricing Strategies
Reasons for taking Markdowns
11. In the Cost Method. Merchandise most recently purchased is assumed to have been sold first. Therefore - the ending inventory reflects the items in stock for the longest period of time. Produces lowest ending inventory value and highest cost of goods
LIFO (last in - first out)
Sell-Through Rate
Markdown Optimization
Pricing Strategies: Price Ranges
12. Dollar markup ($)/ retail price ($)
Markup % of Retail Formula
Cost Complement Formula
Retail Inventory Method
Adage of Profitability for Retailers
13. Priced too high initially - priced too low - selling price of competitors
Selling Price Formula
Pricing Errors
Pricing Strategies
Cost Complement Formula
14. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item
Fixed Assets
Markdown Cancellation ($) Formula
Markdown
Profit
15. 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
Dollar Markdown Formula
Cumulative Markup
Early Markdowns
GMROII (Gross Margin Return on Inventory Investment)
16. The retailers financial condition at a specific point in time
Forced Obsolescence
Adage of Profitability for Retailers
Assets Formula
Balance Sheet
17. 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
Retail Inventory Method
The Cost Method
Planned Initial Markup % Formula
Regular Price
18. 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
Markdown Percentage Formula
Profit Margin
Current Liabilities
Cumulative Markup % Formula
19. First price or Manufacturers suggestet Retal Price (MSRP)
Return on Net Worth
Original Price
Expense Ratio Formula
Accounts Receivable (AR)
20. 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
Profit Margin Analysis Formula
Price Sensitivity
Sell-Through Rate
Markdown Cancellations
21. Net dollar markdown/ net dollar selling price
Markdown Percentage
Ideal Markdown
5 Steps of Retail Inventory Method
Markdown Percentage Formula
22. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Return on Net Worth
Return on Assets (ROA) Formul
Markdown Optimization
Temporary Price Reduction
23. Current Liabilites/ Net Worth
Assets Formula
Debt Equity Ratio Formula
GMROII (Gross Margin Return on Inventory Investment)
Profit
24. 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
Forced Obsolescence
Current Liabilities
Clearance Markdowns
Profit Margin
25. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Off-Price Markdowns
Financial Leverage Ratio
Gross Margin Return on Inventory Investment-GMROI Formula
Buying Errors
26. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Buying Errors
Debt Equity Ratio Formula
Off-Price Markdown Percentage Formula
GMROII (Gross Margin Return on Inventory Investment)
27. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Acid Test or Quick Ratio (QR) Formula
Assets
Acid test or Quick Ratio
Pricing Depends on 2 factors
28. (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
Fixed Liabilities
Pricing Strategies: Price Ranges
Planned Initial Markup % Formula
29. Price Lining - price zones - price ranges
Pricing Strategies
Inventory
Late Markdowns
Markdown Cancellations
30. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
LIFO (last in - first out)
Markdown Cancellation ($) Formula
Assets
Markdown Cancellations
31. Can be transformed simply and rapidly into cash
Current Assets
Loss-Leader
Regular Price
5 Steps of Retail Inventory Method
32. 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
Initial Markup (IMU)
Cash Flow Formula
FIFO (First in - First out)
Assets
33. Financial debts incurred by a retailer
Current Assets
Markdown Percentage Formula
Liabilities
Profit and Loss Statement (P&L Statement)
34. 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.
Off-Price Markdowns
Dollar Markdown Formula
Return on Assets (ROA) Formul
Accounts Receivable (AR)
35. Having the right merchandise - at the right time - for the right price - in the right place
Adage of Profitability for Retailers
Accounts Receivable (AR)
Gross Margin
Turnover Rate Formula
36. Current Assets/ Current Liabilities
Current Ratio (CR) Formula
Cost of Goods Sold (COGS) Formula
Turnover Rate Formula
Financial Leverage Ratio Formula
37. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Selling Price Formula
Cost of Goods Sold (COGS) Formula
Gross Margin
Early Markdowns
38. 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
Return on Net Worth (RONW) Formula
Cost of Goods Sold (COGS) Formula
Debt Equity Ratio Formula
39. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Net Sales
Forced Obsolescence
Expense Ratio
Financial Leverage Ratio Formula
40. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Net Profit
Reasons for taking Markdowns
Fixed Liabilities
Return on Sales
41. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Markdown Percentage
Financial Leverage Ratio
Uncontrollable Errors
Forced Obsolescence
42. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Assets Formula
Depreciation
Fixed Liabilities
Pricing Strategies
43. 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
Adage of Profitability for Retailers
Profit and Loss Statement (P&L Statement)
Balance Sheet
44. Cash Received by the retailer-cash leaving the retailer
GMROII (Gross Margin Return on Inventory Investment)
Temporary Price Reduction
LIFO (last in - first out)
Cash Flow Formula
45. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)
Liabilities
Gross Margin
Markup % of Retail Formula
Depreciation
46. Total Expenses/ Net Sales
Pricing Depends on 2 factors
Retail Price Formula
Expense Ratio Formula
LIFO (last in - first out)
47. Buying errors - promotion errors - pricing errors - uncontrollable errors
Markup % of Cost Formula
Pricing Depends on 2 factors
Reasons for taking Markdowns
Forced Obsolescence
48. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Ideal Markdown
Debt Equity Ratio
Depreciation
Current Liabilities
49. Ranges of prices that appeals for a particular group of consumers
Retail Price Formula
Markup
Initial Markup (IMU)
Pricing Strategies: Price Zones
50. The prices from lowest to highest that are carried within a merchandise category
Financial Leverage Ratio Formula
Current Ratio
Return on Net Worth
Pricing Strategies: Price Ranges
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