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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. The cost of merchandise that was sold (including the method that was used to determine cost)
Cost of Goods Sold
Promotion Errors
Financial Leverage Ratio
Uncontrollable Errors
2. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Forced Obsolescence
Off-Price Markdowns
Initial Markup (IMU)
Promotional Markdown
3. Promotional markdown that involves selling at or near cost for promotional purposes
Loss-Leader
Acid Test or Quick Ratio (QR) Formula
Sell-Through Rate
Price Sensitivity
4. First price or Manufacturers suggestet Retal Price (MSRP)
Selling Price Formula
Assets Formula
Gross Margin Return on Inventory Investment-GMROI Formula
Original Price
5. Original Retail price- markdown selling price
Regular Price
Debt Equity Ratio
Return on Assets (ROA) Formul
Dollar Markdown Formula
6. Cost + Markup
Buying Errors
Current Ratio
Markup
Selling Price Formula
7. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Markdown Cancellations
Debt Equity Ratio Formula
Markdown Cancellation ($) Formula
Off-Price Markdowns
8. Total Expenses/ Net Sales
Pricing Errors
Current Liabilities
Expense Ratio Formula
Cost of Goods Sold
9. The awareness of the consumer to what they perceive to be the window of cost within which they will buy a particular product or service
Price Sensitivity
Cost of Goods Sold
Pricing Strategies: Price Ranges
Balance Sheet
10. Dollar markup ($)/ cost price ($)
Fixed Assets
Net Sales
Markup % of Cost Formula
Selling Price Formula
11. Price Lining - price zones - price ranges
Return on Assets
Pricing Strategies
Early Markdowns
Uncontrollable Errors
12. The energizing force that fuels and sustains our economic system
Profit
Pricing Strategies: Price Ranges
The Cost Method
Return on Sales
13. What the retailer owns in monetary value
Assets
Off-Price Markdowns
Loss-Leader
Cumulative Markup
14. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Net Sales
Ideal Markdown
Net Profit
Markdown Cancellation ($) Formula
15. 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
Pricing Strategies: Price Lining
GMROII (Gross Margin Return on Inventory Investment)
Fixed Assets
16. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Current Ratio (CR) Formula
Retail Price Formula
Cumulative Markup
LIFO (last in - first out)
17. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Turnover Rate Formula
Markdown Cancellations
Off-Price Markdown Percentage Formula
Ideal Markdown
18. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Pricing Strategies: Price Zones
Fixed Assets
Reasons for taking Markdowns
Cash Flow Formula
19. Buying errors - promotion errors - pricing errors - uncontrollable errors
New Price
Return on Assets
Acid Test or Quick Ratio (QR) Formula
Reasons for taking Markdowns
20. (Cash + Accounts Receivable) / Current Liabilities
Return on Assets
Cost of Goods Sold
Markup % of Cost Formula
Acid Test or Quick Ratio (QR) Formula
21. Improper displays - merchandise returns due to high pressure selling
Net Profit
LIFO (last in - first out)
Return on Assets
Promotion Errors
22. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Cost of Goods Sold (COGS) Formula
Current Ratio
Temporary Price Reduction
Price Sensitivity
23. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Fixed Liabilities
Return on Assets
Cash Flow Formula
Profit
24. Short time - like 1 or 2 day sales
Markdown
Current Ratio (CR) Formula
Temporary Price Reduction
Balance Sheet
25. Total Markup on all goods on hand/ retail price of all goods on hand
Return on Assets
Cumulative Markup % Formula
Acid Test or Quick Ratio (QR) Formula
Fixed Assets
26. One that is just enough to move the goods
Operating Expenses
Cash Flow Formula
Ideal Markdown
Current Ratio (CR) Formula
27. Dollar markup ($)/ retail price ($)
Markup % of Retail Formula
Original Price
Off-Price Markdown Percentage Formula
Pricing Strategies
28. Usually lower than original - but held for longer period
Initial Markup (IMU)
Regular Price
Debt Equity Ratio
Expense Ratio Formula
29. 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
Return on Net Worth
Markup % of Retail Formula
Expense Ratio Formula
30. 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
Net Profit
Assets Formula
Markdown optimization
31. 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)
Markdown Percentage
Profit Margin
Accounts Receivable (AR)
32. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Fixed Liabilities
Price Sensitivity
Expense Ratio Formula
Current Liabilities
33. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Pricing Strategies: Price Zones
Accounts Receivable (AR)
Markdown Percentage
Loss-Leader
34. Costs involved in running the business
Gross Margin
Original Price
Current Ratio (CR) Formula
Operating Expenses
35. 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
5 Steps of Retail Inventory Method
Acid Test or Quick Ratio (QR) Formula
Clearance Markdowns
Operating Expenses
36. Revenues received by a retailer
Profit Margin Analysis Formula
Net Sales
The Cost Method
5 Steps of Retail Inventory Method
37. 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
Debt Equity Ratio
Ideal Markdown
5 Steps of Retail Inventory Method
Profit
38. The retailers financial condition at a specific point in time
Balance Sheet
Promotion Errors
Return on Assets (ROA) Formul
Depreciation
39. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
Debt Equity Ratio Formula
Cost Complement Formula
Pricing Depends on 2 factors
Financial Leverage Ratio
40. Price is changed (up or down)
Retail Price Formula
Markup % of Retail Formula
New Price
Buying Errors
41. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Off-Price Markdowns
Cumulative Markup % Formula
Promotional Markdown
Current Liabilities
42. Ranges of prices that appeals for a particular group of consumers
Cumulative Markup % Formula
Return on Net Worth (RONW) Formula
Markup
Pricing Strategies: Price Zones
43. 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
Planned Initial Markup % Formula
The Cost Method
Sell-Through Rate
Selling Price Formula
44. 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.
Fixed Liabilities
Accounts Receivable (AR)
Profit Margin Analysis Formula
Markdown
45. 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
Gross Margin Return on Inventory Investment-GMROI Formula
Markup % of Cost Formula
Pricing Strategies: Price Ranges
The Cost Method
46. Evaluates the managament of capital
Return on Sales
Accounts Receivable (AR)
Turnover Rate Formula
Markdown Cancellation ($) Formula
47. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Pricing Strategies: Price Lining
Sell-Through Rate
Markdown Cancellation ($) Formula
Pricing Depends on 2 factors
48. 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
Gross Margin
Return on Net Worth
GMROII (Gross Margin Return on Inventory Investment)
49. Financial debts incurred by a retailer
GMROII (Gross Margin Return on Inventory Investment)
Retail Inventory Method
Financial Leverage Ratio Formula
Liabilities
50. Can be transformed simply and rapidly into cash
Operating Expenses
Current Assets
Assets
Return on Net Worth (RONW) Formula