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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. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Expense Ratio
Markdown Percentage Formula
Depreciation
Fixed Assets
2. 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
Markdown Cancellation ($) Formula
Assets Formula
Return on Assets (ROA) Formul
Debt Equity Ratio
3. The largest sum of money in current assets. Can be presented in either cost or retail terms. Should be purchased for a short period of time - as products lose monetary value over time and are subject to markdowns.
New Price
Acid Test or Quick Ratio (QR) Formula
Off-Price Markdown Percentage Formula
Inventory
4. Assets collected within one year. Due to the widespread use of credit cards - AR for retailers has diminished with exceptions such as lay-a-way.
Uncontrollable Errors
Accounts Receivable (AR)
Markup % of Retail Formula
Profit Margin Analysis Formula
5. Dollar markup ($)/ retail price ($)
Pricing Strategies: Price Lining
Assets
Markup % of Retail Formula
Retail Inventory Method
6. Improper displays - merchandise returns due to high pressure selling
Markup
Promotion Errors
Markup % of Retail Formula
Net Sales
7. Having the right merchandise - at the right time - for the right price - in the right place
Markdown optimization
Adage of Profitability for Retailers
New Price
LIFO (last in - first out)
8. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Initial Markup (IMU)
Markdown optimization
Reasons for taking Markdowns
Promotional Markdown
9. Cost Price/ (100%-markup %)
Original Price
Off-Price Markdown Percentage Formula
Cost of Goods Sold
Retail Price Formula
10. Original Retail price- markdown selling price
Markup % of Cost Formula
Dollar Markdown Formula
Depreciation
Acid Test or Quick Ratio (QR) Formula
11. 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
Assets
Current Ratio
Price Sensitivity
Return on Assets
12. 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.
GMROII (Gross Margin Return on Inventory Investment)
Dollar Markdown Formula
Markup
Profit Margin
13. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
Initial Markup (IMU)
Cost Complement Formula
FIFO (First in - First out)
Gross Margin Return on Inventory Investment-GMROI Formula
14. Short time - like 1 or 2 day sales
LIFO (last in - first out)
Clearance Markdowns
Temporary Price Reduction
Profit and Loss Statement (P&L Statement)
15. Net Profit After Taxes/ Net Worth
Return on Net Worth (RONW) Formula
Markup % of Cost Formula
Fixed Assets
Retail Price Formula
16. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Off-Price Markdown Percentage Formula
Markdown Percentage Formula
Profit and Loss Statement (P&L Statement)
Cost of Goods Sold (COGS) Formula
17. Cost + Markup
Cost of Goods Sold
Depreciation
Selling Price Formula
Return on Net Worth
18. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Turnover Rate Formula
Return on Assets
Cost of Goods Sold
Current Liabilities
19. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit
Cumulative Markup % Formula
Current Liabilities
Profit and Loss Statement (P&L Statement)
Debt Equity Ratio
20. The number of items remaining in stock x dollar markdown
Pricing Strategies: Price Ranges
Pricing Depends on 2 factors
The Cost Method
Markdown Cancellation ($) Formula
21. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Markdown optimization
Markdown Cancellation ($) Formula
Return on Net Worth
The Cost Method
22. Total Expenses/ Net Sales
Cash Flow Formula
Markdown Percentage Formula
Clearance Markdowns
Expense Ratio Formula
23. 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
Off-Price Markdowns
5 Steps of Retail Inventory Method
Return on Assets (ROA) Formul
Assets
24. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Return on Sales
Markdown
Off-Price Markdowns
Current Assets
25. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented.
Retail Inventory Method
Profit Margin Analysis Formula
Markup % of Retail Formula
Markdown Optimization
26. Total Assets/ Net Worth
Pricing Depends on 2 factors
Financial Leverage Ratio Formula
Acid Test or Quick Ratio (QR) Formula
Gross Margin Return on Inventory Investment-GMROI Formula
27. Total Markup on all goods on hand/ retail price of all goods on hand
Current Assets
FIFO (First in - First out)
Cumulative Markup % Formula
Profit
28. The cost of merchandise that was sold (including the method that was used to determine cost)
LIFO (last in - first out)
Operating Expenses
Cost of Goods Sold
Cost of Goods Sold (COGS) Formula
29. Evaluates the managament of capital
Acid test or Quick Ratio
Expense Ratio
Loss-Leader
Return on Sales
30. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Cost Complement Formula
Price Sensitivity
Cumulative Markup
Markup % of Retail Formula
31. One that is just enough to move the goods
Original Price
Ideal Markdown
Adage of Profitability for Retailers
Planned Initial Markup % Formula
32. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Pricing Strategies: Price Zones
Assets
Reasons for taking Markdowns
Pricing Depends on 2 factors
33. (gross margin % x Turnover) / (100%-markup %)
Retail Inventory Method
Gross Margin Return on Inventory Investment-GMROI Formula
Forced Obsolescence
Reasons for taking Markdowns
34. Costs involved in running the business
Operating Expenses
Early Markdowns
Pricing Strategies: Price Ranges
Gross Margin
35. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Selling Price Formula
Cumulative Markup
Uncontrollable Errors
Dollar Markdown Formula
36. Net Profit After Taxes/ Total Assets
Off-Price Markdown Percentage Formula
Return on Assets (ROA) Formul
Early Markdowns
Dollar Markdown Formula
37. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Markdown Percentage Formula
Pricing Strategies: Price Ranges
Promotion Errors
Markdown Cancellations
38. The weather - merchandise is shopworn - economic downturn
Uncontrollable Errors
Retail Price Formula
Expense Ratio Formula
Turnover Rate Formula
39. 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
Cost of Goods Sold (COGS) Formula
FIFO (First in - First out)
5 Steps of Retail Inventory Method
Sell-Through Rate
40. The prices from lowest to highest that are carried within a merchandise category
Balance Sheet
Financial Leverage Ratio
Fixed Assets
Pricing Strategies: Price Ranges
41. 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
Sell-Through Rate
Inventory
Pricing Depends on 2 factors
Profit Margin
42. 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
Markdown Percentage
The Cost Method
Ideal Markdown
Debt Equity Ratio
43. Priced too high initially - priced too low - selling price of competitors
Pricing Errors
Markdown Cancellations
Net Sales
Cost of Goods Sold
44. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Promotional Markdown
Expense Ratio
Acid test or Quick Ratio
Retail Inventory Method
45. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Planned Initial Markup % Formula
Cost of Goods Sold (COGS) Formula
Cost Complement Formula
Acid Test or Quick Ratio (QR) Formula
46. (Cash + Accounts Receivable) / Current Liabilities
Selling Price Formula
Acid Test or Quick Ratio (QR) Formula
Return on Assets
Pricing Depends on 2 factors
47. The energizing force that fuels and sustains our economic system
Profit
Adage of Profitability for Retailers
Cost of Goods Sold
Current Ratio (CR) Formula
48. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Fixed Liabilities
Markdown Cancellations
Early Markdowns
Pricing Strategies: Price Lining
49. 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
LIFO (last in - first out)
Current Liabilities
GMROII (Gross Margin Return on Inventory Investment)
Markdown optimization
50. Current Liabilites/ Net Worth
Debt Equity Ratio Formula
Markdown Percentage Formula
Current Ratio (CR) Formula
Profit and Loss Statement (P&L Statement)