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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. Having the right merchandise - at the right time - for the right price - in the right place
Adage of Profitability for Retailers
Profit and Loss Statement (P&L Statement)
5 Steps of Retail Inventory Method
Debt Equity Ratio
2. Net Profit After Taxes/ Total Assets
Depreciation
Markdown Cancellations
Return on Assets (ROA) Formul
Debt Equity Ratio Formula
3. 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
Dollar Markdown Formula
Original Price
Debt Equity Ratio
4. Liabilities+ Owner's equity or net worth
Reasons for taking Markdowns
Markdown Optimization
Assets Formula
Promotion Errors
5. First price or Manufacturers suggestet Retal Price (MSRP)
Selling Price Formula
Original Price
Markup % of Retail Formula
Late Markdowns
6. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Price Sensitivity
Buying Errors
Retail Price Formula
Original Price
7. Total Expenses/ Net Sales
Pricing Depends on 2 factors
Sell-Through Rate
Current Liabilities
Expense Ratio Formula
8. Financial debts incurred by a retailer
Markdown Percentage Formula
Selling Price Formula
Off-Price Markdowns
Liabilities
9. 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.
Current Ratio (CR) Formula
Return on Assets (ROA) Formul
Off-Price Markdown Percentage Formula
Promotional Markdown
10. Current Liabilites/ Net Worth
New Price
Off-Price Markdown Percentage Formula
Debt Equity Ratio Formula
Initial Markup (IMU)
11. Can be transformed simply and rapidly into cash
Current Assets
5 Steps of Retail Inventory Method
Price Sensitivity
Regular Price
12. Net Profit/ Net Sales
Assets Formula
Pricing Strategies: Price Ranges
Profit Margin Analysis Formula
Cumulative Markup
13. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented.
Pricing Depends on 2 factors
Return on Net Worth
Markdown Optimization
Operating Expenses
14. 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
Current Assets
The Cost Method
Profit
Buying Errors
15. (gross margin % x Turnover) / (100%-markup %)
Pricing Strategies
Turnover Rate Formula
Gross Margin Return on Inventory Investment-GMROI Formula
Fixed Liabilities
16. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Markup % of Retail Formula
Promotional Markdown
Markdown Cancellations
Cumulative Markup % Formula
17. Net dollar markdown/ net dollar selling price
Cumulative Markup % Formula
Debt Equity Ratio
Cumulative Markup
Markdown Percentage Formula
18. 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
Cost of Goods Sold
Turnover Rate Formula
Early Markdowns
Return on Assets (ROA) Formul
19. Dollar markup ($)/ cost price ($)
Markup % of Retail Formula
Temporary Price Reduction
Markup % of Cost Formula
Fixed Assets
20. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Debt Equity Ratio Formula
Reasons for taking Markdowns
Expense Ratio
Return on Net Worth
21. Buying errors - promotion errors - pricing errors - uncontrollable errors
LIFO (last in - first out)
Reasons for taking Markdowns
Markdown
Markup % of Cost Formula
22. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Profit Margin
Cost of Goods Sold (COGS) Formula
Return on Assets (ROA) Formul
Current Assets
23. Improper displays - merchandise returns due to high pressure selling
Current Ratio
Pricing Strategies: Price Zones
Pricing Strategies: Price Ranges
Promotion Errors
24. Total Markup on all goods on hand/ retail price of all goods on hand
Expense Ratio
Loss-Leader
Initial Markup (IMU)
Cumulative Markup % Formula
25. Evaluates the managament of capital
Pricing Strategies: Price Ranges
Return on Sales
Cumulative Markup % Formula
Return on Assets
26. Sales less cost of goods sold
Gross Margin
Return on Net Worth (RONW) Formula
Profit
Profit Margin
27. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Pricing Depends on 2 factors
Temporary Price Reduction
Net Sales
Expense Ratio Formula
28. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Return on Net Worth
Current Ratio (CR) Formula
Return on Net Worth (RONW) Formula
Cumulative Markup
29. 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
Current Ratio (CR) Formula
Debt Equity Ratio
Early Markdowns
Markdown Cancellations
30. 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.
Cumulative Markup
Late Markdowns
Accounts Receivable (AR)
Current Ratio (CR) Formula
31. The prices from lowest to highest that are carried within a merchandise category
Loss-Leader
Financial Leverage Ratio
Promotion Errors
Pricing Strategies: Price Ranges
32. Sales for the period/ average inventory
Turnover Rate Formula
Off-Price Markdown Percentage Formula
Late Markdowns
Financial Leverage Ratio
33. 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.
Cost of Goods Sold
Dollar Markdown Formula
Acid test or Quick Ratio
New Price
34. 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
Accounts Receivable (AR)
Dollar Markdown Formula
Return on Assets
Price Sensitivity
35. The number of items remaining in stock x dollar markdown
Markdown Percentage
Return on Sales
Markdown Cancellation ($) Formula
Cumulative Markup % Formula
36. The energizing force that fuels and sustains our economic system
Markdown Optimization
Financial Leverage Ratio Formula
Profit
Acid test or Quick Ratio
37. Cost + Markup
Retail Price Formula
Selling Price Formula
LIFO (last in - first out)
Markdown Cancellations
38. The weather - merchandise is shopworn - economic downturn
Initial Markup (IMU)
Debt Equity Ratio Formula
Net Sales
Uncontrollable Errors
39. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
New Price
Debt Equity Ratio Formula
Markdown Percentage
Pricing Strategies: Price Lining
40. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Return on Assets
Gross Margin
Initial Markup (IMU)
Current Liabilities
41. The retailers financial condition at a specific point in time
Balance Sheet
Return on Net Worth
Current Ratio (CR) Formula
Expense Ratio Formula
42. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Markup % of Retail Formula
Ideal Markdown
Off-Price Markdowns
Return on Assets
43. Short time - like 1 or 2 day sales
Pricing Strategies: Price Lining
FIFO (First in - First out)
Net Sales
Temporary Price Reduction
44. 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
5 Steps of Retail Inventory Method
Profit Margin Analysis Formula
Clearance Markdowns
Acid test or Quick Ratio
45. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Balance Sheet
Markdown optimization
Fixed Assets
Pricing Depends on 2 factors
46. 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
New Price
LIFO (last in - first out)
Markdown Cancellation ($) Formula
Pricing Depends on 2 factors
47. 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
New Price
Debt Equity Ratio Formula
Current Ratio
Depreciation
48. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Fixed Assets
Adage of Profitability for Retailers
Pricing Strategies: Price Lining
Current Liabilities
49. Costs involved in running the business
Operating Expenses
Acid Test or Quick Ratio (QR) Formula
Balance Sheet
Regular Price
50. Price is changed (up or down)
Initial Markup (IMU)
FIFO (First in - First out)
Markup % of Cost Formula
New Price