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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. Original Retail price- markdown selling price
Dollar Markdown Formula
Cash Flow Formula
Fixed Assets
Promotional Markdown
2. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented.
Dollar Markdown Formula
Profit Margin
Markup % of Retail Formula
Markdown Optimization
3. 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.
Liabilities
Profit Margin
Acid test or Quick Ratio
Markdown Percentage
4. Cost Price/ (100%-markup %)
Markdown Optimization
Acid test or Quick Ratio
Profit Margin
Retail Price Formula
5. Total Markup on all goods on hand/ retail price of all goods on hand
Planned Initial Markup % Formula
Cumulative Markup % Formula
Depreciation
Liabilities
6. Sales for the period/ average inventory
Markdown optimization
Turnover Rate Formula
Gross Margin
Profit
7. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Profit and Loss Statement (P&L Statement)
Return on Assets
GMROII (Gross Margin Return on Inventory Investment)
Return on Sales
8. Ranges of prices that appeals for a particular group of consumers
New Price
Pricing Strategies
Acid test or Quick Ratio
Pricing Strategies: Price Zones
9. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Balance Sheet
Markup % of Cost Formula
Late Markdowns
Fixed Assets
10. 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
Markdown Percentage
Assets
Assets Formula
The Cost Method
11. 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.
Pricing Errors
Net Profit
Markup
Assets Formula
12. (gross margin % x Turnover) / (100%-markup %)
Profit
Gross Margin Return on Inventory Investment-GMROI Formula
Financial Leverage Ratio Formula
Off-Price Markdown Percentage Formula
13. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Pricing Depends on 2 factors
Forced Obsolescence
Assets Formula
Markup
14. 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
Fixed Liabilities
Turnover Rate Formula
15. One that is just enough to move the goods
Markdown Percentage
Early Markdowns
Ideal Markdown
Expense Ratio
16. 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.
Initial Markup (IMU)
Late Markdowns
Return on Assets (ROA) Formul
Loss-Leader
17. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Markdown Percentage
Initial Markup (IMU)
Adage of Profitability for Retailers
Sell-Through Rate
18. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Gross Margin Return on Inventory Investment-GMROI Formula
Assets Formula
Off-Price Markdown Percentage Formula
Planned Initial Markup % Formula
19. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
Assets Formula
Cumulative Markup % Formula
Pricing Strategies: Price Ranges
Initial Markup (IMU)
20. 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
Loss-Leader
Fixed Assets
Sell-Through Rate
Markup
21. Price Lining - price zones - price ranges
Depreciation
Pricing Strategies
Price Sensitivity
Return on Assets
22. Dollar markup ($)/ cost price ($)
Retail Inventory Method
Operating Expenses
Markup % of Cost Formula
Return on Assets
23. The energizing force that fuels and sustains our economic system
Expense Ratio Formula
The Cost Method
Profit
Loss-Leader
24. What the retailer owns in monetary value
Return on Net Worth (RONW) Formula
Accounts Receivable (AR)
Assets
Promotional Markdown
25. Net Profit After Taxes/ Total Assets
Sell-Through Rate
Return on Assets (ROA) Formul
Temporary Price Reduction
Markdown Optimization
26. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Off-Price Markdowns
Current Liabilities
Sell-Through Rate
Turnover Rate Formula
27. Price is changed (up or down)
Markup % of Retail Formula
New Price
Cumulative Markup % Formula
Profit and Loss Statement (P&L Statement)
28. 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
Planned Initial Markup % Formula
Price Sensitivity
Cumulative Markup
FIFO (First in - First out)
29. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Retail Price Formula
Return on Assets
Promotion Errors
Off-Price Markdowns
30. Revenues received by a retailer
Liabilities
Regular Price
Net Sales
Profit
31. The cost of merchandise that was sold (including the method that was used to determine cost)
Regular Price
Cost of Goods Sold
Current Ratio (CR) Formula
Pricing Depends on 2 factors
32. 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
Inventory
Depreciation
Profit Margin
Pricing Strategies: Price Zones
33. Costs involved in running the business
Operating Expenses
Pricing Depends on 2 factors
Net Sales
Cost Complement Formula
34. Liabilities+ Owner's equity or net worth
Assets Formula
Retail Price Formula
Pricing Strategies: Price Zones
Financial Leverage Ratio
35. Short time - like 1 or 2 day sales
Temporary Price Reduction
Markdown Percentage Formula
New Price
Markdown
36. Current Assets/ Current Liabilities
Return on Assets (ROA) Formul
Ideal Markdown
Return on Net Worth (RONW) Formula
Current Ratio (CR) Formula
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
Off-Price Markdown Percentage Formula
Return on Assets
Profit
Profit and Loss Statement (P&L Statement)
38. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Assets
Net Sales
Sell-Through Rate
Cost Complement 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
Cumulative Markup
Markdown optimization
Off-Price Markdown Percentage Formula
Acid Test or Quick Ratio (QR) Formula
40. Dollar markup ($)/ retail price ($)
Markdown Cancellations
Markup % of Retail Formula
Debt Equity Ratio
Current Ratio (CR) Formula
41. 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.
Promotional Markdown
Off-Price Markdowns
Net Profit
Acid Test or Quick Ratio (QR) Formula
42. (planned expenses + planned operating profit + planned stock shortages + markdowns + employee and customer discounts) / (planned net sales + stock shortages + markdowns + employee and customer discounts) x 100%
Planned Initial Markup % Formula
Initial Markup (IMU)
Profit
Cumulative Markup % Formula
43. Net Profit After Taxes/ Net Worth
Return on Sales
Return on Net Worth (RONW) Formula
Profit and Loss Statement (P&L Statement)
Retail Inventory Method
44. Having the right merchandise - at the right time - for the right price - in the right place
Temporary Price Reduction
Cost of Goods Sold
Adage of Profitability for Retailers
Fixed Liabilities
45. Cash Received by the retailer-cash leaving the retailer
Promotional Markdown
Cash Flow Formula
Current Assets
Planned Initial Markup % Formula
46. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Return on Net Worth
Initial Markup (IMU)
Net Sales
Net Profit
47. Net Profit/ Net Sales
Fixed Liabilities
Markdown Cancellation ($) Formula
Profit Margin Analysis Formula
Cost of Goods Sold
48. Total Assets/ Net Worth
Profit Margin
Financial Leverage Ratio Formula
Loss-Leader
Markdown optimization
49. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Dollar Markdown Formula
Cost Complement Formula
Fixed Assets
Fixed Liabilities
50. The awareness of the consumer to what they perceive to be the window of cost within which they will buy a particular product or service
Price Sensitivity
Markdown Cancellation ($) Formula
Promotional Markdown
Profit and Loss Statement (P&L Statement)