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. Original Retail price- markdown selling price
Loss-Leader
Dollar Markdown Formula
Fixed Liabilities
Markdown optimization
2. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Turnover Rate Formula
Current Ratio
Markdown Cancellations
Cumulative Markup
3. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Operating Expenses
Off-Price Markdowns
Return on Net Worth
Selling Price Formula
4. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Current Liabilities
Off-Price Markdowns
Loss-Leader
Pricing Strategies: Price Lining
5. Ranges of prices that appeals for a particular group of consumers
Pricing Strategies: Price Zones
Regular Price
The Cost Method
Profit Margin
6. Dollar markup ($)/ retail price ($)
Current Ratio
Markup % of Retail Formula
Return on Net Worth (RONW) Formula
Original Price
7. Total Markup on all goods on hand/ retail price of all goods on hand
Pricing Strategies: Price Zones
Cumulative Markup % Formula
5 Steps of Retail Inventory Method
Gross Margin Return on Inventory Investment-GMROI Formula
8. Revenues received by a retailer
Markup
Profit Margin Analysis Formula
Net Sales
Accounts Receivable (AR)
9. The number of items remaining in stock x dollar markdown
Current Ratio
Markdown Cancellation ($) Formula
Debt Equity Ratio
Balance Sheet
10. (Cash + Accounts Receivable) / Current Liabilities
Markdown Cancellation ($) Formula
Acid Test or Quick Ratio (QR) Formula
Debt Equity Ratio Formula
Markdown
11. 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
Pricing Depends on 2 factors
Return on Net Worth (RONW) Formula
Depreciation
GMROII (Gross Margin Return on Inventory Investment)
12. The prices from lowest to highest that are carried within a merchandise category
Selling Price Formula
Pricing Strategies: Price Ranges
Retail Price Formula
Off-Price Markdowns
13. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Fixed Assets
Pricing Depends on 2 factors
Assets
Net Profit
14. 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
Markdown
Sell-Through Rate
New Price
Markup % of Cost Formula
15. 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
Profit
Cumulative Markup
Turnover Rate Formula
Early Markdowns
16. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)
Depreciation
Selling Price Formula
Promotion Errors
Off-Price Markdowns
17. First price or Manufacturers suggestet Retal Price (MSRP)
Promotional Markdown
Original Price
Profit and Loss Statement (P&L Statement)
Net Sales
18. What the retailer owns in monetary value
Pricing Strategies
Assets
Profit Margin
FIFO (First in - First out)
19. 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.
Liabilities
Inventory
Cash Flow Formula
Markdown Percentage
20. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Off-Price Markdowns
Buying Errors
Depreciation
Retail Inventory Method
21. Cost Price/ (100%-markup %)
Acid test or Quick Ratio
Profit and Loss Statement (P&L Statement)
Retail Price Formula
Planned Initial Markup % Formula
22. 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
Late Markdowns
Turnover Rate Formula
Selling Price Formula
23. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
Net Sales
Ideal Markdown
Return on Sales
Initial Markup (IMU)
24. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Cumulative Markup
Regular Price
Assets Formula
Acid Test or Quick Ratio (QR) Formula
25. Cost + Markup
Selling Price Formula
Financial Leverage Ratio Formula
Off-Price Markdowns
Return on Assets
26. The cost of merchandise that was sold (including the method that was used to determine cost)
LIFO (last in - first out)
Cost of Goods Sold
Financial Leverage Ratio Formula
Cumulative Markup % Formula
27. 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.
Retail Inventory Method
Pricing Strategies: Price Zones
Acid test or Quick Ratio
Markup
28. 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 optimization
Pricing Strategies: Price Ranges
Markup
Profit and Loss Statement (P&L Statement)
29. Sales less cost of goods sold
Dollar Markdown Formula
Profit and Loss Statement (P&L Statement)
Gross Margin
Pricing Errors
30. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Forced Obsolescence
Pricing Errors
Pricing Strategies: Price Ranges
Depreciation
31. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Off-Price Markdown Percentage Formula
Retail Inventory Method
Dollar Markdown Formula
Profit Margin Analysis Formula
32. The energizing force that fuels and sustains our economic system
Gross Margin Return on Inventory Investment-GMROI Formula
Return on Net Worth (RONW) Formula
Profit
Markdown Cancellations
33. Financial debts incurred by a retailer
Return on Assets (ROA) Formul
Acid Test or Quick Ratio (QR) Formula
Liabilities
Depreciation
34. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Fixed Liabilities
Forced Obsolescence
Profit Margin Analysis Formula
Cost of Goods Sold
35. The weather - merchandise is shopworn - economic downturn
Adage of Profitability for Retailers
Assets
Balance Sheet
Uncontrollable Errors
36. Usually lower than original - but held for longer period
Balance Sheet
Planned Initial Markup % Formula
Regular Price
Gross Margin
37. Total Expenses/ Net Sales
Current Assets
Expense Ratio Formula
Return on Sales
Financial Leverage Ratio Formula
38. 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.
Markup % of Retail Formula
Clearance Markdowns
Cumulative Markup % Formula
Acid test or Quick Ratio
39. Sales for the period/ average inventory
5 Steps of Retail Inventory Method
Pricing Strategies: Price Ranges
Turnover Rate Formula
Pricing Errors
40. Dollar markup ($)/ cost price ($)
Cost of Goods Sold
Profit Margin Analysis Formula
Markup % of Cost Formula
Reasons for taking Markdowns
41. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Return on Net Worth (RONW) Formula
Cumulative Markup % Formula
Loss-Leader
Pricing Depends on 2 factors
42. 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
Profit
Gross Margin Return on Inventory Investment-GMROI Formula
FIFO (First in - First out)
Profit Margin
43. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item
Assets Formula
Operating Expenses
Off-Price Markdown Percentage Formula
Markdown
44. Improper displays - merchandise returns due to high pressure selling
Promotion Errors
Markdown optimization
New Price
Pricing Errors
45. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Adage of Profitability for Retailers
Markdown
Cost of Goods Sold
Cost Complement Formula
46. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Fixed Liabilities
Current Liabilities
Operating Expenses
Profit Margin
47. Liabilities+ Owner's equity or net worth
Assets Formula
Markdown Optimization
Initial Markup (IMU)
Inventory
48. 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
Pricing Strategies: Price Ranges
Markdown Cancellations
Regular Price
Current Ratio
49. Having the right merchandise - at the right time - for the right price - in the right place
Adage of Profitability for Retailers
Markdown Percentage
Off-Price Markdown Percentage Formula
Inventory
50. 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
Profit Margin
Off-Price Markdown Percentage Formula
Acid Test or Quick Ratio (QR) Formula