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. The prices from lowest to highest that are carried within a merchandise category
Pricing Strategies: Price Ranges
Early Markdowns
Balance Sheet
Loss-Leader
2. Net dollar markdown/ net dollar selling price
Return on Sales
Markdown optimization
Cost of Goods Sold
Markdown Percentage Formula
3. The weather - merchandise is shopworn - economic downturn
Pricing Errors
Uncontrollable Errors
Current Assets
Current Liabilities
4. (gross margin % x Turnover) / (100%-markup %)
Operating Expenses
Profit Margin
Planned Initial Markup % Formula
Gross Margin Return on Inventory Investment-GMROI Formula
5. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Off-Price Markdown Percentage Formula
Cumulative Markup
Early Markdowns
Balance Sheet
6. 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
Current Liabilities
Debt Equity Ratio
Assets Formula
7. 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
Current Ratio
Markdown optimization
Dollar Markdown Formula
8. First price or Manufacturers suggestet Retal Price (MSRP)
Return on Net Worth (RONW) Formula
Original Price
Ideal Markdown
Regular Price
9. Total Markup on all goods on hand/ retail price of all goods on hand
Loss-Leader
Cumulative Markup
Sell-Through Rate
Cumulative Markup % Formula
10. Financial debts incurred by a retailer
Assets Formula
Current Liabilities
Liabilities
Markup % of Cost Formula
11. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
Profit
5 Steps of Retail Inventory Method
Adage of Profitability for Retailers
Initial Markup (IMU)
12. The number of items remaining in stock x dollar markdown
Profit Margin Analysis Formula
Pricing Strategies: Price Lining
Markdown Cancellation ($) Formula
Gross Margin
13. 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
Liabilities
Markup
Planned Initial Markup % Formula
14. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Loss-Leader
Expense Ratio Formula
Off-Price Markdowns
Markdown optimization
15. 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.
Gross Margin Return on Inventory Investment-GMROI Formula
Acid test or Quick Ratio
Expense Ratio
Balance Sheet
16. 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
Reasons for taking Markdowns
Current Ratio
Initial Markup (IMU)
Adage of Profitability for Retailers
17. 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
Clearance Markdowns
Current Assets
Forced Obsolescence
Late Markdowns
18. Sales for the period/ average inventory
Current Liabilities
Turnover Rate Formula
Clearance Markdowns
Markup
19. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Buying Errors
The Cost Method
Original Price
Operating Expenses
20. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item
Markdown
Promotional Markdown
Buying Errors
Gross Margin
21. Price is changed (up or down)
Ideal Markdown
New Price
Promotion Errors
Pricing Strategies: Price Ranges
22. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Expense Ratio Formula
Fixed Liabilities
Assets Formula
Cumulative Markup % Formula
23. Net Profit/ Net Sales
Markdown Optimization
Profit Margin Analysis Formula
Return on Assets
Current Liabilities
24. Total Assets/ Net Worth
Assets
Cash Flow Formula
Financial Leverage Ratio Formula
Markup
25. 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.
Markup % of Retail Formula
Inventory
Cost of Goods Sold
Pricing Strategies: Price Lining
26. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
5 Steps of Retail Inventory Method
Debt Equity Ratio Formula
Cash Flow Formula
Cost of Goods Sold (COGS) Formula
27. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Markup % of Cost Formula
Gross Margin
LIFO (last in - first out)
Markdown Cancellations
28. 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
Turnover Rate Formula
Debt Equity Ratio
Markdown
Original Price
29. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Markup % of Retail Formula
Late Markdowns
Current Liabilities
Return on Sales
30. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit
Markdown Cancellations
Temporary Price Reduction
Return on Net Worth (RONW) Formula
Profit and Loss Statement (P&L Statement)
31. Dollar markup ($)/ cost price ($)
Markup % of Cost Formula
Pricing Strategies: Price Lining
Cash Flow Formula
Return on Net Worth
32. The cost of merchandise that was sold (including the method that was used to determine cost)
Assets Formula
Current Liabilities
Cost of Goods Sold
Profit Margin
33. Sales less cost of goods sold
Depreciation
Planned Initial Markup % Formula
Pricing Strategies: Price Ranges
Gross Margin
34. 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
Gross Margin
Fixed Assets
Planned Initial Markup % Formula
5 Steps of Retail Inventory Method
35. The energizing force that fuels and sustains our economic system
Profit Margin
New Price
Profit
Profit Margin Analysis Formula
36. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Off-Price Markdown Percentage Formula
Acid test or Quick Ratio
Operating Expenses
Markup % of Cost Formula
37. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Markup
Retail Inventory Method
Ideal Markdown
Cost of Goods Sold
38. Total Expenses/ Net Sales
Markup % of Cost Formula
Expense Ratio Formula
Liabilities
Debt Equity Ratio Formula
39. Revenues received by a retailer
Late Markdowns
Return on Assets (ROA) Formul
Return on Assets
Net Sales
40. Improper displays - merchandise returns due to high pressure selling
Net Profit
Assets
Cash Flow Formula
Promotion Errors
41. 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
Ideal Markdown
Gross Margin Return on Inventory Investment-GMROI Formula
Markdown Percentage Formula
Profit Margin
42. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Uncontrollable Errors
Adage of Profitability for Retailers
Ideal Markdown
Off-Price Markdowns
43. Net Profit After Taxes/ Net Worth
Ideal Markdown
Return on Net Worth (RONW) Formula
New Price
Buying Errors
44. Short time - like 1 or 2 day sales
Return on Sales
Liabilities
The Cost Method
Temporary Price Reduction
45. Promotional markdown that involves selling at or near cost for promotional purposes
Reasons for taking Markdowns
Assets Formula
Loss-Leader
Promotion Errors
46. Can be transformed simply and rapidly into cash
Profit and Loss Statement (P&L Statement)
Current Assets
Retail Price Formula
Price Sensitivity
47. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Net Profit
Early Markdowns
Cost Complement Formula
Gross Margin Return on Inventory Investment-GMROI Formula
48. Cost + Markup
Markup % of Retail Formula
Selling Price Formula
Late Markdowns
Liabilities
49. 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)
Pricing Strategies: Price Ranges
Forced Obsolescence
Sell-Through Rate
50. Buying errors - promotion errors - pricing errors - uncontrollable errors
Reasons for taking Markdowns
Return on Assets
Clearance Markdowns
Sell-Through Rate