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. 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
Off-Price Markdowns
Markup
Selling Price Formula
FIFO (First in - First out)
2. The cost of merchandise that was sold (including the method that was used to determine cost)
Pricing Strategies: Price Zones
Cost Complement Formula
Markup % of Cost Formula
Cost of Goods Sold
3. 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
Net Profit
Loss-Leader
Assets
4. 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
New Price
Current Ratio (CR) Formula
Profit and Loss Statement (P&L Statement)
Profit Margin
5. 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.
Promotional Markdown
Inventory
Planned Initial Markup % Formula
Markdown Percentage Formula
6. Current Assets/ Current Liabilities
Assets
Reasons for taking Markdowns
Current Ratio (CR) Formula
Acid test or Quick Ratio
7. Cost Price/ (100%-markup %)
Initial Markup (IMU)
Clearance Markdowns
Retail Price Formula
Return on Assets
8. Ranges of prices that appeals for a particular group of consumers
Assets Formula
LIFO (last in - first out)
Pricing Strategies: Price Zones
Loss-Leader
9. Usually lower than original - but held for longer period
Return on Net Worth
Regular Price
Late Markdowns
Net Profit
10. The prices from lowest to highest that are carried within a merchandise category
Forced Obsolescence
Pricing Strategies: Price Ranges
Retail Price Formula
Markdown
11. Net Profit After Taxes/ Net Worth
Return on Net Worth (RONW) Formula
Markdown Optimization
Financial Leverage Ratio Formula
Gross Margin
12. Improper displays - merchandise returns due to high pressure selling
Promotion Errors
Pricing Depends on 2 factors
Pricing Strategies
Current Ratio (CR) Formula
13. Priced too high initially - priced too low - selling price of competitors
Operating Expenses
Return on Net Worth
Pricing Errors
Current Ratio (CR) Formula
14. Current Liabilites/ Net Worth
Off-Price Markdowns
Debt Equity Ratio Formula
Inventory
Cumulative Markup
15. The retailers financial condition at a specific point in time
Balance Sheet
Current Assets
Liabilities
Planned Initial Markup % Formula
16. 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.
Off-Price Markdowns
Acid test or Quick Ratio
Dollar Markdown Formula
Expense Ratio Formula
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
Retail Price Formula
Depreciation
Price Sensitivity
Financial Leverage Ratio Formula
18. Financial debts incurred by a retailer
Expense Ratio
Ideal Markdown
Liabilities
Balance Sheet
19. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Expense Ratio Formula
Pricing Strategies: Price Ranges
Fixed Assets
Markdown Cancellations
20. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)
Markup % of Cost Formula
Depreciation
Liabilities
Pricing Strategies: Price Zones
21. The number of items remaining in stock x dollar markdown
Uncontrollable Errors
Loss-Leader
Markdown Cancellation ($) Formula
Accounts Receivable (AR)
22. Evaluates the managament of capital
Promotion Errors
Pricing Strategies: Price Ranges
Promotional Markdown
Return on Sales
23. Basic premise is to increase profits through more sales without an increase in inventory. Inventory is expressed in cost terms rather than cost percent - because it is related to investment dollars in gross margin - it should be expressed in cost num
GMROII (Gross Margin Return on Inventory Investment)
FIFO (First in - First out)
Cost Complement Formula
Gross Margin
24. Dollar markup ($)/ retail price ($)
Net Sales
Assets Formula
Markup % of Retail Formula
Profit Margin Analysis Formula
25. (gross margin % x Turnover) / (100%-markup %)
Gross Margin
Assets
Pricing Strategies: Price Ranges
Gross Margin Return on Inventory Investment-GMROI Formula
26. 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
Adage of Profitability for Retailers
Cost of Goods Sold (COGS) Formula
Off-Price Markdown Percentage Formula
Current Ratio
27. Cash Received by the retailer-cash leaving the retailer
Depreciation
Late Markdowns
Cash Flow Formula
Promotional Markdown
28. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item
Markdown
Markdown Percentage Formula
Off-Price Markdowns
Dollar Markdown Formula
29. Total Markup on all goods on hand/ retail price of all goods on hand
Debt Equity Ratio
Cumulative Markup % Formula
Initial Markup (IMU)
Dollar Markdown Formula
30. Short time - like 1 or 2 day sales
Balance Sheet
Markup % of Retail Formula
Temporary Price Reduction
GMROII (Gross Margin Return on Inventory Investment)
31. The weather - merchandise is shopworn - economic downturn
Expense Ratio
Uncontrollable Errors
Initial Markup (IMU)
Profit
32. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Adage of Profitability for Retailers
Accounts Receivable (AR)
Sell-Through Rate
Cost of Goods Sold (COGS) Formula
33. Having the right merchandise - at the right time - for the right price - in the right place
Adage of Profitability for Retailers
LIFO (last in - first out)
Profit Margin
Profit and Loss Statement (P&L Statement)
34. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Adage of Profitability for Retailers
Current Liabilities
Acid Test or Quick Ratio (QR) Formula
Return on Net Worth
35. First price or Manufacturers suggestet Retal Price (MSRP)
Original Price
Markdown Cancellation ($) Formula
Turnover Rate Formula
Fixed Liabilities
36. Total Assets/ Net Worth
Financial Leverage Ratio Formula
Cumulative Markup % Formula
Regular Price
Pricing Strategies: Price Ranges
37. 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.
Planned Initial Markup % Formula
Late Markdowns
Fixed Assets
Retail Inventory Method
38. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
New Price
Retail Inventory Method
Acid test or Quick Ratio
Profit
39. (Cash + Accounts Receivable) / Current Liabilities
Fixed Liabilities
Gross Margin
Planned Initial Markup % Formula
Acid Test or Quick Ratio (QR) Formula
40. 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
Early Markdowns
LIFO (last in - first out)
Markdown
Buying Errors
41. 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.
Expense Ratio
LIFO (last in - first out)
Pricing Depends on 2 factors
Late Markdowns
42. 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
The Cost Method
Profit Margin Analysis Formula
Net Profit
Original Price
43. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Pricing Strategies: Price Lining
Regular Price
Promotion Errors
Financial Leverage Ratio
44. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
Reasons for taking Markdowns
Current Ratio
Markdown Cancellation ($) Formula
Initial Markup (IMU)
45. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Pricing Depends on 2 factors
Profit and Loss Statement (P&L Statement)
New Price
Inventory
46. Buying errors - promotion errors - pricing errors - uncontrollable errors
Planned Initial Markup % Formula
Debt Equity Ratio Formula
Debt Equity Ratio
Reasons for taking Markdowns
47. 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
Initial Markup (IMU)
Current Ratio (CR) Formula
Cost of Goods Sold (COGS) Formula
Early Markdowns
48. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
GMROII (Gross Margin Return on Inventory Investment)
Expense Ratio Formula
Fixed Liabilities
Current Liabilities
49. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Buying Errors
Promotion Errors
Depreciation
Markdown Optimization
50. Net dollar markdown/ net dollar selling price
Gross Margin
Off-Price Markdown Percentage Formula
Markdown Percentage Formula
Assets