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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. Can be transformed simply and rapidly into cash
Gross Margin Return on Inventory Investment-GMROI Formula
Assets Formula
Loss-Leader
Current Assets
2. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Markdown Cancellations
Late Markdowns
Operating Expenses
Return on Sales
3. Promotional markdown that involves selling at or near cost for promotional purposes
Loss-Leader
Cumulative Markup
Forced Obsolescence
Depreciation
4. One that is just enough to move the goods
Markup % of Cost Formula
Ideal Markdown
Debt Equity Ratio
Markdown Optimization
5. (Cash + Accounts Receivable) / Current Liabilities
Acid Test or Quick Ratio (QR) Formula
Current Ratio
Markup % of Retail Formula
Selling Price Formula
6. 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
Pricing Errors
Pricing Strategies: Price Ranges
Profit Margin
FIFO (First in - First out)
7. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Retail Inventory Method
Current Ratio (CR) Formula
Cost of Goods Sold
Return on Net Worth (RONW) Formula
8. 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.
Promotion Errors
Price Sensitivity
Late Markdowns
Temporary Price Reduction
9. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Markup % of Cost Formula
Balance Sheet
Promotion Errors
Markdown Percentage
10. Buying errors - promotion errors - pricing errors - uncontrollable errors
Return on Net Worth (RONW) Formula
Current Ratio (CR) Formula
Reasons for taking Markdowns
Profit Margin Analysis Formula
11. The weather - merchandise is shopworn - economic downturn
Uncontrollable Errors
Profit
Expense Ratio
Buying Errors
12. 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
Current Liabilities
The Cost Method
Assets
Markdown Cancellation ($) Formula
13. Current Liabilites/ Net Worth
Promotional Markdown
Debt Equity Ratio Formula
Cost Complement Formula
Pricing Strategies: Price Lining
14. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
Net Sales
Profit Margin Analysis Formula
Financial Leverage Ratio
Adage of Profitability for Retailers
15. Dollar markup ($)/ cost price ($)
Markup % of Cost Formula
Markdown Percentage
Loss-Leader
Accounts Receivable (AR)
16. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Pricing Errors
Expense Ratio
Fixed Liabilities
Pricing Strategies: Price Lining
17. First price or Manufacturers suggestet Retal Price (MSRP)
Liabilities
Early Markdowns
Sell-Through Rate
Original Price
18. The higher the ratio the quicker current liabilities can be paid. This ratio also indicates the margin of safety a retailer has on hand to cover possible shrinkages
Original Price
Markdown Percentage
Cost of Goods Sold
Current Ratio
19. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Return on Assets
Current Assets
LIFO (last in - first out)
Profit
20. Based on a calculation commonly represented as a percentage - comparing the amount of inventory a retailer receives from a manufacturer or supplier against what is actually sold to the consumer
Promotion Errors
Pricing Strategies
Sell-Through Rate
Return on Net Worth
21. Price Lining - price zones - price ranges
Pricing Strategies
Balance Sheet
Inventory
Fixed Liabilities
22. Having the right merchandise - at the right time - for the right price - in the right place
Adage of Profitability for Retailers
Current Ratio (CR) Formula
Return on Assets (ROA) Formul
Initial Markup (IMU)
23. Usually lower than original - but held for longer period
Cost of Goods Sold (COGS) Formula
Regular Price
Initial Markup (IMU)
New Price
24. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Markdown Cancellation ($) Formula
Forced Obsolescence
Initial Markup (IMU)
Cash Flow Formula
25. The retailers financial condition at a specific point in time
Sell-Through Rate
Return on Net Worth
Balance Sheet
Reasons for taking Markdowns
26. Cost Price/ (100%-markup %)
Retail Price Formula
Selling Price Formula
Retail Inventory Method
Pricing Strategies: Price Zones
27. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Pricing Depends on 2 factors
Balance Sheet
Late Markdowns
Expense Ratio
28. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Cash Flow Formula
Off-Price Markdowns
Sell-Through Rate
Retail Inventory Method
29. Ranges of prices that appeals for a particular group of consumers
Pricing Strategies: Price Zones
Operating Expenses
Clearance Markdowns
Liabilities
30. Net dollar markdown/ net dollar selling price
Markdown Percentage
Regular Price
Markdown Percentage Formula
Sell-Through Rate
31. Revenues received by a retailer
Net Sales
Current Assets
Off-Price Markdown Percentage Formula
Price Sensitivity
32. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Markdown
Dollar Markdown Formula
Markdown Cancellation ($) Formula
Return on Net Worth
33. 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.
Late Markdowns
Markup
Markdown optimization
Current Liabilities
34. Improper displays - merchandise returns due to high pressure selling
Temporary Price Reduction
Sell-Through Rate
Promotion Errors
Price Sensitivity
35. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Net Sales
Markdown optimization
Pricing Strategies
Pricing Depends on 2 factors
36. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Financial Leverage Ratio
Cumulative Markup
Turnover Rate Formula
Temporary Price Reduction
37. Price is changed (up or down)
New Price
Promotion Errors
Pricing Depends on 2 factors
LIFO (last in - first out)
38. 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.
Current Assets
Fixed Liabilities
Return on Assets
Expense Ratio
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)
Ideal Markdown
Assets Formula
Cost of Goods Sold
40. Liabilities+ Owner's equity or net worth
Accounts Receivable (AR)
Assets Formula
Net Sales
Sell-Through Rate
41. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Late Markdowns
Profit
Acid Test or Quick Ratio (QR) Formula
Current Liabilities
42. Total Expenses/ Net Sales
Expense Ratio Formula
Return on Assets (ROA) Formul
Loss-Leader
Pricing Strategies
43. Net Profit After Taxes/ Net Worth
Off-Price Markdowns
Loss-Leader
Pricing Strategies: Price Zones
Return on Net Worth (RONW) Formula
44. Costs involved in running the business
Return on Sales
Markdown Cancellations
Current Liabilities
Operating Expenses
45. Sales for the period/ average inventory
Turnover Rate Formula
Current Ratio (CR) Formula
Return on Net Worth (RONW) Formula
Cost of Goods Sold (COGS) Formula
46. Dollar markup ($)/ retail price ($)
Cumulative Markup
Financial Leverage Ratio Formula
Initial Markup (IMU)
Markup % of Retail Formula
47. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Fixed Assets
FIFO (First in - First out)
Forced Obsolescence
Expense Ratio Formula
48. What the retailer owns in monetary value
Assets
Sell-Through Rate
Net Sales
Return on Net Worth
49. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit
Operating Expenses
Accounts Receivable (AR)
Profit and Loss Statement (P&L Statement)
Uncontrollable Errors
50. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item
Financial Leverage Ratio
Expense Ratio Formula
Markdown
Loss-Leader