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. Priced too high initially - priced too low - selling price of competitors
Pricing Errors
Markdown optimization
Markdown
Dollar Markdown Formula
2. Total Expenses/ Net Sales
Expense Ratio Formula
Cumulative Markup % Formula
Fixed Liabilities
Net Profit
3. (gross margin % x Turnover) / (100%-markup %)
Profit Margin Analysis Formula
Gross Margin Return on Inventory Investment-GMROI Formula
Expense Ratio
Financial Leverage Ratio Formula
4. Current Liabilites/ Net Worth
Loss-Leader
Debt Equity Ratio Formula
Pricing Strategies: Price Zones
Cost Complement Formula
5. Having the right merchandise - at the right time - for the right price - in the right place
Markup % of Retail Formula
Adage of Profitability for Retailers
New Price
Initial Markup (IMU)
6. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Net Profit
Forced Obsolescence
Markdown Cancellations
Pricing Errors
7. Price Lining - price zones - price ranges
Fixed Liabilities
Return on Net Worth
Pricing Strategies
Return on Assets
8. Cash Received by the retailer-cash leaving the retailer
Current Ratio
Cumulative Markup % Formula
Net Profit
Cash Flow Formula
9. First price or Manufacturers suggestet Retal Price (MSRP)
Depreciation
Expense Ratio Formula
Buying Errors
Original Price
10. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Retail Inventory Method
Loss-Leader
Turnover Rate Formula
Profit and Loss Statement (P&L Statement)
11. 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.
Liabilities
FIFO (First in - First out)
Expense Ratio
Markup % of Retail Formula
12. Cost + Markup
Markdown Cancellation ($) Formula
Sell-Through Rate
Debt Equity Ratio
Selling Price Formula
13. Amount of markdown usually less - take the loss early will be easier - strengthen goodwill - replenish stock in lower price lines - leads to higher stock turnover - higher likelihood merchandise will sell in a timely manner
Early Markdowns
Profit Margin Analysis Formula
Inventory
Clearance Markdowns
14. Dollar markup ($)/ cost price ($)
Markup % of Cost Formula
FIFO (First in - First out)
Pricing Strategies
Buying Errors
15. Short time - like 1 or 2 day sales
Fixed Liabilities
Temporary Price Reduction
Balance Sheet
Promotional Markdown
16. The prices from lowest to highest that are carried within a merchandise category
Profit and Loss Statement (P&L Statement)
Cost Complement Formula
Pricing Strategies: Price Ranges
Sell-Through Rate
17. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
Profit Margin
Uncontrollable Errors
Financial Leverage Ratio
Markdown Percentage Formula
18. The cost of merchandise that was sold (including the method that was used to determine cost)
Return on Net Worth
Gross Margin
Sell-Through Rate
Cost of Goods Sold
19. 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.
Late Markdowns
Cost of Goods Sold
Markup
GMROII (Gross Margin Return on Inventory Investment)
20. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Cost Complement Formula
Markup % of Retail Formula
Return on Sales
Early Markdowns
21. 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
Late Markdowns
Net Profit
Forced Obsolescence
22. Buying errors - promotion errors - pricing errors - uncontrollable errors
Assets Formula
Early Markdowns
Reasons for taking Markdowns
Inventory
23. 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
Original Price
Accounts Receivable (AR)
Debt Equity Ratio
LIFO (last in - first out)
24. Evaluates the managament of capital
The Cost Method
Markup
Return on Sales
Expense Ratio
25. Original Retail price- markdown selling price
Dollar Markdown Formula
Turnover Rate Formula
Pricing Strategies: Price Zones
GMROII (Gross Margin Return on Inventory Investment)
26. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Pricing Errors
Original Price
New Price
Return on Assets
27. 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
Sell-Through Rate
Markdown Percentage Formula
Cost of Goods Sold
Off-Price Markdown Percentage Formula
28. The retailers financial condition at a specific point in time
Gross Margin
Turnover Rate Formula
Pricing Strategies: Price Lining
Balance Sheet
29. Total Assets/ Net Worth
Pricing Strategies: Price Lining
Net Sales
Financial Leverage Ratio Formula
Promotion Errors
30. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Cash Flow Formula
Pricing Strategies: Price Lining
Debt Equity Ratio
Fixed Assets
31. Improper displays - merchandise returns due to high pressure selling
Forced Obsolescence
Markdown
Turnover Rate Formula
Promotion Errors
32. Can be transformed simply and rapidly into cash
Return on Assets (ROA) Formul
Assets Formula
Promotional Markdown
Current Assets
33. 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
Markup % of Cost Formula
Current Ratio
Retail Inventory Method
Early Markdowns
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
Markdown Cancellations
Pricing Errors
Liabilities
Profit Margin
35. One that is just enough to move the goods
Retail Inventory Method
FIFO (First in - First out)
Cost of Goods Sold (COGS) Formula
Ideal Markdown
36. 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.
Acid test or Quick Ratio
Price Sensitivity
Cash Flow Formula
Liabilities
37. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit
Current Ratio
Profit and Loss Statement (P&L Statement)
Markdown Cancellation ($) Formula
Pricing Strategies: Price Zones
38. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Cumulative Markup
Current Assets
New Price
Acid Test or Quick Ratio (QR) Formula
39. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented.
Current Liabilities
Markdown Optimization
Cash Flow Formula
Cumulative Markup % Formula
40. 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.
Inventory
Current Assets
Markup % of Retail Formula
Reasons for taking Markdowns
41. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Buying Errors
Gross Margin
Loss-Leader
Fixed Assets
42. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Planned Initial Markup % Formula
Cash Flow Formula
Acid Test or Quick Ratio (QR) Formula
Cost of Goods Sold (COGS) Formula
43. Revenues received by a retailer
Fixed Assets
Net Sales
Pricing Strategies
Accounts Receivable (AR)
44. Current Assets/ Current Liabilities
Pricing Strategies
Current Ratio (CR) Formula
Debt Equity Ratio
Financial Leverage Ratio
45. Financial debts incurred by a retailer
Cost of Goods Sold
Accounts Receivable (AR)
Liabilities
Expense Ratio
46. 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
Reasons for taking Markdowns
Profit Margin
Return on Net Worth (RONW) Formula
47. 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.
Early Markdowns
Expense Ratio
Gross Margin
Promotional Markdown
48. 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
Expense Ratio
Initial Markup (IMU)
FIFO (First in - First out)
The Cost Method
49. The number of items remaining in stock x dollar markdown
Markdown Cancellation ($) Formula
Acid Test or Quick Ratio (QR) Formula
Current Ratio (CR) Formula
Pricing Strategies: Price Zones
50. Net Profit After Taxes/ Total Assets
Return on Assets (ROA) Formul
Gross Margin
Promotion Errors
Operating Expenses