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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. First price or Manufacturers suggestet Retal Price (MSRP)
Original Price
Markup % of Cost Formula
Off-Price Markdowns
Current Assets
2. (Cash + Accounts Receivable) / Current Liabilities
Acid Test or Quick Ratio (QR) Formula
Pricing Errors
Net Profit
Gross Margin Return on Inventory Investment-GMROI Formula
3. Liabilities+ Owner's equity or net worth
Assets Formula
Assets
Depreciation
Current Ratio (CR) Formula
4. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Return on Net Worth (RONW) Formula
Adage of Profitability for Retailers
Fixed Assets
Cost Complement Formula
5. What the retailer owns in monetary value
Debt Equity Ratio Formula
Assets
Temporary Price Reduction
Uncontrollable Errors
6. Cash Received by the retailer-cash leaving the retailer
Balance Sheet
Cost of Goods Sold (COGS) Formula
Return on Sales
Cash Flow Formula
7. Total Assets/ Net Worth
Loss-Leader
Financial Leverage Ratio Formula
Off-Price Markdowns
Temporary Price Reduction
8. The cost of merchandise that was sold (including the method that was used to determine cost)
Gross Margin Return on Inventory Investment-GMROI Formula
Retail Inventory Method
Cost of Goods Sold
Current Ratio (CR) Formula
9. The weather - merchandise is shopworn - economic downturn
Cumulative Markup
Uncontrollable Errors
Accounts Receivable (AR)
Dollar Markdown Formula
10. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Cumulative Markup
Gross Margin Return on Inventory Investment-GMROI Formula
New Price
Early Markdowns
11. 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
Pricing Depends on 2 factors
Loss-Leader
Acid test or Quick Ratio
12. The retailers financial condition at a specific point in time
Acid test or Quick Ratio
Balance Sheet
Retail Inventory Method
Debt Equity Ratio Formula
13. Cost + Markup
Fixed Assets
Selling Price Formula
Markup
Financial Leverage Ratio Formula
14. Price Lining - price zones - price ranges
Current Assets
Pricing Strategies
Promotional Markdown
Financial Leverage Ratio
15. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Cost Complement Formula
Fixed Liabilities
Profit and Loss Statement (P&L Statement)
Gross Margin
16. 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
Markdown Percentage
Original Price
Net Sales
17. Priced too high initially - priced too low - selling price of competitors
Pricing Errors
Gross Margin
Markdown Percentage Formula
New Price
18. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item
Clearance Markdowns
Cumulative Markup % Formula
Pricing Depends on 2 factors
Markdown
19. The energizing force that fuels and sustains our economic system
Adage of Profitability for Retailers
Cost of Goods Sold
Return on Net Worth (RONW) Formula
Profit
20. Net dollar markdown/ net dollar selling price
Pricing Errors
Original Price
Expense Ratio
Markdown Percentage Formula
21. Original Retail price- markdown selling price
Acid test or Quick Ratio
Dollar Markdown Formula
Retail Inventory Method
Cost of Goods Sold
22. Dollar markup ($)/ cost price ($)
Early Markdowns
Current Ratio
Fixed Liabilities
Markup % of Cost Formula
23. Promotional markdown that involves selling at or near cost for promotional purposes
Return on Net Worth (RONW) Formula
Expense Ratio Formula
Return on Net Worth
Loss-Leader
24. Net Profit After Taxes/ Total Assets
Pricing Errors
Reasons for taking Markdowns
Return on Assets (ROA) Formul
Retail Price Formula
25. Financial debts incurred by a retailer
Pricing Strategies
Markdown optimization
Liabilities
Assets Formula
26. Total Markup on all goods on hand/ retail price of all goods on hand
Cumulative Markup % Formula
Debt Equity Ratio Formula
Net Profit
Pricing Strategies: Price Ranges
27. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Net Profit
Price Sensitivity
Off-Price Markdown Percentage Formula
Reasons for taking Markdowns
28. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Late Markdowns
Pricing Strategies
Pricing Depends on 2 factors
Original Price
29. 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
Depreciation
Dollar Markdown Formula
GMROII (Gross Margin Return on Inventory Investment)
Original Price
30. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
Loss-Leader
Markdown optimization
The Cost Method
Financial Leverage Ratio
31. Short time - like 1 or 2 day sales
Gross Margin
Cash Flow Formula
Temporary Price Reduction
Markdown
32. Price is changed (up or down)
Markup
Markdown
Markdown optimization
New Price
33. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Fixed Liabilities
Off-Price Markdown Percentage Formula
Cumulative Markup % Formula
Loss-Leader
34. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
LIFO (last in - first out)
Initial Markup (IMU)
Net Sales
Return on Assets (ROA) Formul
35. 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.
Planned Initial Markup % Formula
Cost of Goods Sold (COGS) Formula
Accounts Receivable (AR)
Promotion Errors
36. 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 Sales
Acid test or Quick Ratio
Price Sensitivity
Markdown optimization
37. Cost Price/ (100%-markup %)
Financial Leverage Ratio
Profit Margin Analysis Formula
Retail Price Formula
Balance Sheet
38. Usually lower than original - but held for longer period
Regular Price
Markdown Cancellations
Late Markdowns
Liabilities
39. 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.
Operating Expenses
Debt Equity Ratio
Inventory
5 Steps of Retail Inventory Method
40. The number of items remaining in stock x dollar markdown
Cost of Goods Sold (COGS) Formula
Reasons for taking Markdowns
Markdown Cancellation ($) Formula
Promotional Markdown
41. Merchandise will sell at highest price longer period of time - appear exclusive - sale of goods at regular price is not disrupted - greater amount of goods can be accumulated and then marked down.
Late Markdowns
Early Markdowns
Markup
Net Sales
42. Costs involved in running the business
Operating Expenses
Pricing Strategies: Price Lining
LIFO (last in - first out)
Pricing Strategies
43. Price reduction for merchandise that has not lived up to buyers' expectations. Includes broken assortments of merchandise - merchandise lines that buyers no longer want to carry - shopworn goods - items that haven't sold because of an event beyond bu
Cumulative Markup % Formula
Promotional Markdown
Expense Ratio Formula
Clearance Markdowns
44. Dollar markup ($)/ retail price ($)
Markdown Cancellation ($) Formula
Markup % of Retail Formula
Off-Price Markdowns
Cumulative Markup
45. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Temporary Price Reduction
Financial Leverage Ratio
Buying Errors
Cumulative Markup % Formula
46. Having the right merchandise - at the right time - for the right price - in the right place
Debt Equity Ratio Formula
Cost of Goods Sold (COGS) Formula
Financial Leverage Ratio
Adage of Profitability for Retailers
47. Net Profit/ Net Sales
Sell-Through Rate
Profit Margin Analysis Formula
Markdown Cancellation ($) Formula
The Cost Method
48. Buying errors - promotion errors - pricing errors - uncontrollable errors
Selling Price Formula
Reasons for taking Markdowns
Loss-Leader
Fixed Liabilities
49. Revenues received by a retailer
Net Sales
Uncontrollable Errors
Gross Margin
Debt Equity Ratio
50. Net Profit After Taxes/ Net Worth
Return on Net Worth (RONW) Formula
Turnover Rate Formula
Sell-Through Rate
Retail Inventory Method