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. Current Assets/ Current Liabilities
Dollar Markdown Formula
Assets Formula
Cumulative Markup
Current Ratio (CR) Formula
2. Sales for the period/ average inventory
Cost Complement Formula
GMROII (Gross Margin Return on Inventory Investment)
Current Ratio
Turnover Rate Formula
3. Liabilities+ Owner's equity or net worth
Expense Ratio
Off-Price Markdowns
Pricing Strategies: Price Ranges
Assets Formula
4. The cost of merchandise that was sold (including the method that was used to determine cost)
Pricing Errors
Dollar Markdown Formula
Markdown
Cost of Goods Sold
5. 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
Operating Expenses
Current Ratio
Regular Price
Off-Price Markdown Percentage Formula
6. Total Expenses/ Net Sales
Expense Ratio Formula
Liabilities
Buying Errors
Loss-Leader
7. 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.
Depreciation
Pricing Strategies: Price Ranges
Turnover Rate Formula
Expense Ratio
8. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Selling Price Formula
Fixed Assets
Promotion Errors
Initial Markup (IMU)
9. Net Profit/ Net Sales
Regular Price
Buying Errors
Profit Margin Analysis Formula
Markup % of Cost Formula
10. 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.
Original Price
Promotional Markdown
Profit
Off-Price Markdown Percentage Formula
11. Net Profit After Taxes/ Total Assets
Return on Assets (ROA) Formul
GMROII (Gross Margin Return on Inventory Investment)
Pricing Strategies: Price Ranges
Pricing Depends on 2 factors
12. Total Assets/ Net Worth
Financial Leverage Ratio Formula
Profit Margin Analysis Formula
Markdown Percentage
Profit
13. The retailers financial condition at a specific point in time
Balance Sheet
Current Ratio
Acid test or Quick Ratio
The Cost Method
14. Having the right merchandise - at the right time - for the right price - in the right place
Debt Equity Ratio
Uncontrollable Errors
Current Liabilities
Adage of Profitability for Retailers
15. Dollar markup ($)/ retail price ($)
Markup % of Retail Formula
LIFO (last in - first out)
Return on Assets (ROA) Formul
Ideal Markdown
16. Ranges of prices that appeals for a particular group of consumers
Pricing Strategies: Price Zones
Ideal Markdown
Turnover Rate Formula
Original Price
17. Total Markup on all goods on hand/ retail price of all goods on hand
Early Markdowns
Cumulative Markup % Formula
Pricing Depends on 2 factors
Markdown
18. 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
GMROII (Gross Margin Return on Inventory Investment)
Profit and Loss Statement (P&L Statement)
Profit Margin
Temporary Price Reduction
19. The energizing force that fuels and sustains our economic system
Regular Price
Profit
Retail Price Formula
Balance Sheet
20. Cost + Markup
Markdown optimization
Selling Price Formula
Acid test or Quick Ratio
GMROII (Gross Margin Return on Inventory Investment)
21. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
New Price
Cost of Goods Sold
Cumulative Markup
FIFO (First in - First out)
22. Net dollar markdown/ net dollar selling price
Debt Equity Ratio Formula
Markdown Percentage Formula
Off-Price Markdowns
Adage of Profitability for Retailers
23. In the Cost Method. Merchandise most recently purchased is assumed to have been sold first. Therefore - the ending inventory reflects the items in stock for the longest period of time. Produces lowest ending inventory value and highest cost of goods
Buying Errors
Dollar Markdown Formula
Cumulative Markup % Formula
LIFO (last in - first out)
24. Dollar markup ($)/ cost price ($)
Retail Inventory Method
Debt Equity Ratio Formula
Markup % of Cost Formula
Acid Test or Quick Ratio (QR) Formula
25. Net Profit After Taxes/ Net Worth
Pricing Strategies
Return on Net Worth (RONW) Formula
Current Ratio
Fixed Assets
26. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Current Liabilities
Markdown Percentage
Gross Margin Return on Inventory Investment-GMROI Formula
Markdown optimization
27. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Pricing Strategies: Price Ranges
Return on Net Worth
Retail Inventory Method
Pricing Depends on 2 factors
28. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Off-Price Markdown Percentage Formula
Uncontrollable Errors
Markdown Optimization
Buying Errors
29. (gross margin % x Turnover) / (100%-markup %)
Markup
Gross Margin
Gross Margin Return on Inventory Investment-GMROI Formula
Markdown Percentage
30. What the retailer owns in monetary value
Markdown Percentage Formula
Assets
Markup % of Retail Formula
Markdown
31. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Cost Complement Formula
Gross Margin
Markdown optimization
Return on Assets (ROA) Formul
32. Short time - like 1 or 2 day sales
Acid Test or Quick Ratio (QR) Formula
Off-Price Markdown Percentage Formula
Temporary Price Reduction
Pricing Strategies: Price Zones
33. 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.
Early Markdowns
Return on Assets (ROA) Formul
Late Markdowns
Gross Margin Return on Inventory Investment-GMROI Formula
34. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Acid Test or Quick Ratio (QR) Formula
Markup
Markdown Percentage
Financial Leverage Ratio
35. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
LIFO (last in - first out)
Net Profit
Debt Equity Ratio Formula
Financial Leverage Ratio
36. 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
Markdown Percentage Formula
Clearance Markdowns
Late Markdowns
Promotion Errors
37. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Accounts Receivable (AR)
Acid test or Quick Ratio
Markup % of Retail Formula
Return on Net Worth
38. First price or Manufacturers suggestet Retal Price (MSRP)
Original Price
Ideal Markdown
Debt Equity Ratio Formula
Temporary Price Reduction
39. 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.
Accounts Receivable (AR)
Cost of Goods Sold (COGS) Formula
Off-Price Markdown Percentage Formula
Pricing Errors
40. Costs involved in running the business
New Price
Operating Expenses
Off-Price Markdowns
Debt Equity Ratio Formula
41. Sales less cost of goods sold
Pricing Errors
Current Liabilities
Gross Margin
Return on Net Worth
42. 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
Pricing Errors
5 Steps of Retail Inventory Method
Fixed Assets
Price Sensitivity
43. Buying errors - promotion errors - pricing errors - uncontrollable errors
Reasons for taking Markdowns
Markdown Percentage Formula
Late Markdowns
Financial Leverage Ratio
44. Improper displays - merchandise returns due to high pressure selling
Promotional Markdown
Pricing Depends on 2 factors
LIFO (last in - first out)
Promotion Errors
45. Price Lining - price zones - price ranges
Fixed Assets
Promotion Errors
Pricing Strategies
Pricing Strategies: Price Zones
46. The number of items remaining in stock x dollar markdown
Fixed Liabilities
Debt Equity Ratio
Markdown Cancellation ($) Formula
Turnover Rate Formula
47. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)
Initial Markup (IMU)
Depreciation
Cumulative Markup
Operating Expenses
48. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Markdown Cancellations
Markdown Optimization
Gross Margin
Retail Inventory Method
49. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Pricing Depends on 2 factors
Expense Ratio
Markup % of Retail Formula
5 Steps of Retail Inventory Method
50. (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%
Retail Inventory Method
Planned Initial Markup % Formula
Uncontrollable Errors
Cumulative Markup