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Test your basic knowledge |
Retail Financials
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Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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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. Having the right merchandise - at the right time - for the right price - in the right place
Inventory
Adage of Profitability for Retailers
Accounts Receivable (AR)
Current Assets
2. Total Assets/ Net Worth
Financial Leverage Ratio Formula
Initial Markup (IMU)
Current Liabilities
Profit Margin
3. Financial debts incurred by a retailer
Acid Test or Quick Ratio (QR) Formula
Liabilities
LIFO (last in - first out)
Gross Margin Return on Inventory Investment-GMROI Formula
4. Net Profit After Taxes/ Total Assets
Return on Sales
Return on Assets (ROA) Formul
Expense Ratio
Return on Assets
5. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Return on Net Worth
Current Assets
Off-Price Markdown Percentage Formula
Expense Ratio
6. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
Pricing Errors
Original Price
Financial Leverage Ratio
Operating Expenses
7. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Selling Price Formula
Cost Complement Formula
Adage of Profitability for Retailers
Fixed Assets
8. The number of items remaining in stock x dollar markdown
Current Assets
Current Liabilities
Markdown Cancellation ($) Formula
Return on Sales
9. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Pricing Errors
Buying Errors
Retail Price Formula
Markdown Percentage Formula
10. Cost + Markup
Debt Equity Ratio
Turnover Rate Formula
Selling Price Formula
Inventory
11. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Debt Equity Ratio
Acid test or Quick Ratio
Current Liabilities
Liabilities
12. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Fixed Assets
Adage of Profitability for Retailers
LIFO (last in - first out)
Inventory
13. 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
Inventory
FIFO (First in - First out)
Balance Sheet
Cost of Goods Sold (COGS) Formula
14. The cost of merchandise that was sold (including the method that was used to determine cost)
Cash Flow Formula
Cost of Goods Sold
Profit
Late Markdowns
15. Evaluates the managament of capital
Pricing Depends on 2 factors
Return on Sales
Pricing Strategies: Price Zones
Price Sensitivity
16. Original Retail price- markdown selling price
Dollar Markdown Formula
Retail Price Formula
GMROII (Gross Margin Return on Inventory Investment)
Turnover Rate Formula
17. Liabilities+ Owner's equity or net worth
Profit Margin
Assets Formula
Pricing Strategies: Price Zones
Cash Flow Formula
18. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Cumulative Markup
Profit
Buying Errors
Assets
19. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Pricing Depends on 2 factors
Return on Net Worth
Price Sensitivity
Regular Price
20. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Return on Assets
Markdown Optimization
Net Profit
Operating Expenses
21. The weather - merchandise is shopworn - economic downturn
Markup % of Cost Formula
Return on Net Worth
Late Markdowns
Uncontrollable Errors
22. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Return on Assets (ROA) Formul
Off-Price Markdowns
Selling Price Formula
Profit Margin Analysis Formula
23. First price or Manufacturers suggestet Retal Price (MSRP)
Pricing Strategies: Price Lining
Depreciation
Original Price
Current Ratio
24. 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
Assets Formula
Early Markdowns
Net Sales
The Cost Method
25. Priced too high initially - priced too low - selling price of competitors
Return on Net Worth (RONW) Formula
Pricing Errors
Forced Obsolescence
Markup % of Cost Formula
26. 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
Inventory
Forced Obsolescence
Debt Equity Ratio
Sell-Through Rate
27. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit
Retail Price Formula
Financial Leverage Ratio
Profit and Loss Statement (P&L Statement)
Pricing Strategies: Price Ranges
28. Costs involved in running the business
Return on Assets
Operating Expenses
Markdown Cancellation ($) Formula
Markdown Cancellations
29. 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
Return on Assets (ROA) Formul
Debt Equity Ratio
Price Sensitivity
Net Profit
30. Cash Received by the retailer-cash leaving the retailer
Markdown Percentage
Balance Sheet
Cash Flow Formula
Return on Net Worth
31. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Sell-Through Rate
Markdown optimization
Cost Complement Formula
Initial Markup (IMU)
32. Total Markup on all goods on hand/ retail price of all goods on hand
Return on Assets (ROA) Formul
Markdown
Cumulative Markup % Formula
The Cost Method
33. 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
The Cost Method
Gross Margin
Adage of Profitability for Retailers
Dollar Markdown Formula
34. Revenues received by a retailer
Dollar Markdown Formula
Net Sales
LIFO (last in - first out)
Profit
35. Price Lining - price zones - price ranges
Return on Assets (ROA) Formul
Pricing Depends on 2 factors
FIFO (First in - First out)
Pricing Strategies
36. 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
Markdown Percentage Formula
Current Ratio
Promotional Markdown
Expense Ratio Formula
37. (Cash + Accounts Receivable) / Current Liabilities
Current Liabilities
Off-Price Markdowns
Acid Test or Quick Ratio (QR) Formula
Retail Price Formula
38. 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
Cost Complement Formula
Markdown Cancellation ($) Formula
Clearance Markdowns
Cumulative Markup
39. Usually lower than original - but held for longer period
Regular Price
Retail Price Formula
Debt Equity Ratio
Expense Ratio
40. The energizing force that fuels and sustains our economic system
Profit
Cumulative Markup
Markdown optimization
Return on Sales
41. Price is changed (up or down)
New Price
Cost Complement Formula
Profit
Debt Equity Ratio Formula
42. Promotional markdown that involves selling at or near cost for promotional purposes
Return on Assets (ROA) Formul
Loss-Leader
Markup
The Cost Method
43. Net Profit/ Net Sales
Promotional Markdown
FIFO (First in - First out)
Profit Margin Analysis Formula
Buying Errors
44. Total Expenses/ Net Sales
GMROII (Gross Margin Return on Inventory Investment)
Expense Ratio Formula
Fixed Liabilities
Pricing Errors
45. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Debt Equity Ratio Formula
Liabilities
Net Sales
Retail Inventory Method
46. Ensures that there is enough cash to pay debts. Any time the ratio is colse to 1 - the retailer is said to be in a liquid position.
Gross Margin
Markup % of Cost Formula
Acid test or Quick Ratio
Original Price
47. Sales for the period/ average inventory
Regular Price
Pricing Depends on 2 factors
Return on Net Worth
Turnover Rate Formula
48. (gross margin % x Turnover) / (100%-markup %)
Early Markdowns
Gross Margin Return on Inventory Investment-GMROI Formula
Ideal Markdown
Markdown
49. Sales less cost of goods sold
Return on Net Worth (RONW) Formula
Ideal Markdown
Gross Margin
Financial Leverage Ratio Formula
50. Dollar markup ($)/ cost price ($)
Forced Obsolescence
Markup % of Cost Formula
Return on Net Worth (RONW) Formula
Buying Errors
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