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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. Ranges of prices that appeals for a particular group of consumers
Cost Complement Formula
Pricing Strategies: Price Zones
Return on Assets (ROA) Formul
Assets
2. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Markup % of Retail Formula
Cumulative Markup % Formula
Return on Net Worth
Return on Net Worth (RONW) Formula
3. Buying errors - promotion errors - pricing errors - uncontrollable errors
Assets Formula
Current Assets
Reasons for taking Markdowns
Financial Leverage Ratio Formula
4. Net Profit/ Net Sales
Profit Margin Analysis Formula
Pricing Strategies: Price Ranges
Pricing Strategies
Uncontrollable Errors
5. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Markdown optimization
Current Ratio (CR) Formula
Markdown Percentage
New Price
6. Priced too high initially - priced too low - selling price of competitors
Return on Net Worth (RONW) Formula
Current Ratio
Pricing Errors
Retail Price Formula
7. 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
Pricing Strategies
Assets
Return on Assets
Sell-Through Rate
8. Promotional markdown that involves selling at or near cost for promotional purposes
Loss-Leader
Forced Obsolescence
Markdown Optimization
Assets Formula
9. Evaluates the managament of capital
Current Liabilities
Return on Sales
Off-Price Markdown Percentage Formula
Ideal Markdown
10. Dollar markup ($)/ cost price ($)
Markup % of Cost Formula
Pricing Depends on 2 factors
Clearance Markdowns
Net Profit
11. One that is just enough to move the goods
Current Ratio
5 Steps of Retail Inventory Method
Loss-Leader
Ideal Markdown
12. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Pricing Strategies: Price Lining
Sell-Through Rate
Turnover Rate Formula
Cumulative Markup % Formula
13. 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
Cash Flow Formula
Assets Formula
Expense Ratio
Early Markdowns
14. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
Initial Markup (IMU)
Cost of Goods Sold
Assets
Current Ratio
15. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Liabilities
Return on Assets (ROA) Formul
Loss-Leader
Cumulative Markup
16. 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.
Initial Markup (IMU)
Balance Sheet
Acid test or Quick Ratio
Inventory
17. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Selling Price Formula
Off-Price Markdown Percentage Formula
Financial Leverage Ratio
Adage of Profitability for Retailers
18. Total Assets/ Net Worth
Retail Price Formula
Ideal Markdown
Financial Leverage Ratio Formula
Pricing Strategies
19. 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
Return on Assets
Gross Margin
Price Sensitivity
Dollar Markdown Formula
20. 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
Turnover Rate Formula
New Price
Markup % of Retail Formula
Current Ratio
21. Net Profit After Taxes/ Net Worth
Return on Net Worth (RONW) Formula
Pricing Strategies: Price Zones
Off-Price Markdown Percentage Formula
Return on Assets (ROA) Formul
22. 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.
Cash Flow Formula
Current Ratio
Off-Price Markdowns
Late Markdowns
23. 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.
Acid test or Quick Ratio
Net Profit
Return on Net Worth
Accounts Receivable (AR)
24. 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.
Markdown Percentage Formula
Dollar Markdown Formula
Assets Formula
Markup
25. (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%
Early Markdowns
Markdown Percentage
Planned Initial Markup % Formula
Current Ratio (CR) Formula
26. Price Lining - price zones - price ranges
Fixed Assets
Profit and Loss Statement (P&L Statement)
Pricing Strategies
Markdown Optimization
27. Net Profit After Taxes/ Total Assets
Operating Expenses
Pricing Strategies: Price Lining
Return on Assets (ROA) Formul
Markdown optimization
28. Cash Received by the retailer-cash leaving the retailer
Promotion Errors
Dollar Markdown Formula
Cash Flow Formula
Markup % of Cost Formula
29. What the retailer owns in monetary value
Assets
Cash Flow Formula
Net Profit
Cumulative Markup % Formula
30. Original Retail price- markdown selling price
Original Price
Off-Price Markdowns
Dollar Markdown Formula
Cost of Goods Sold (COGS) Formula
31. Price is changed (up or down)
New Price
Regular Price
Price Sensitivity
Acid test or Quick Ratio
32. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Promotion Errors
Pricing Depends on 2 factors
Original Price
Off-Price Markdown Percentage Formula
33. Total Markup on all goods on hand/ retail price of all goods on hand
Return on Net Worth (RONW) Formula
Profit Margin
Depreciation
Cumulative Markup % Formula
34. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Sell-Through Rate
Off-Price Markdowns
Dollar Markdown Formula
Current Assets
35. Net dollar markdown/ net dollar selling price
Cost Complement Formula
Pricing Strategies: Price Lining
Markdown Percentage Formula
Return on Sales
36. 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
Current Ratio (CR) Formula
Acid test or Quick Ratio
Profit Margin
Retail Inventory Method
37. 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
Debt Equity Ratio
Loss-Leader
Off-Price Markdown Percentage Formula
Forced Obsolescence
38. Revenues received by a retailer
Return on Sales
Accounts Receivable (AR)
Net Sales
Original Price
39. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Markdown Percentage
Fixed Assets
Financial Leverage Ratio Formula
Return on Assets (ROA) Formul
40. Current Assets/ Current Liabilities
The Cost Method
Return on Assets (ROA) Formul
Current Ratio (CR) Formula
Pricing Strategies: Price Zones
41. Costs involved in running the business
GMROII (Gross Margin Return on Inventory Investment)
Operating Expenses
Clearance Markdowns
Pricing Strategies: Price Lining
42. The energizing force that fuels and sustains our economic system
Cumulative Markup % Formula
Profit
Markdown
Loss-Leader
43. Sales for the period/ average inventory
Retail Inventory Method
Pricing Strategies: Price Ranges
Markup % of Cost Formula
Turnover Rate Formula
44. Liabilities+ Owner's equity or net worth
Expense Ratio Formula
Retail Price Formula
Assets Formula
Debt Equity Ratio Formula
45. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Temporary Price Reduction
Return on Assets
Forced Obsolescence
Retail Price Formula
46. 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
New Price
Reasons for taking Markdowns
5 Steps of Retail Inventory Method
Price Sensitivity
47. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Fixed Liabilities
Pricing Strategies
Profit Margin
Profit Margin Analysis Formula
48. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item
Promotional Markdown
Pricing Strategies: Price Zones
Markdown
Pricing Strategies: Price Lining
49. The number of items remaining in stock x dollar markdown
Markup % of Retail Formula
Uncontrollable Errors
The Cost Method
Markdown Cancellation ($) Formula
50. 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
Cost of Goods Sold
The Cost Method
Pricing Strategies: Price Lining
Off-Price Markdowns