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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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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. 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
Return on Net Worth
Markdown Percentage Formula
Clearance Markdowns
Early Markdowns
2. Costs involved in running the business
FIFO (First in - First out)
Operating Expenses
Original Price
Cumulative Markup % Formula
3. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Pricing Strategies: Price Lining
Initial Markup (IMU)
Markdown Optimization
Dollar Markdown Formula
4. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Markdown optimization
Original Price
Pricing Strategies: Price Ranges
Net Profit
5. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented.
Selling Price Formula
Balance Sheet
Markdown Optimization
Markdown Cancellations
6. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Clearance Markdowns
The Cost Method
Assets
Off-Price Markdown Percentage Formula
7. 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.
Net Profit
Markup
Assets
Return on Sales
8. 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
Sell-Through Rate
Off-Price Markdowns
Acid test or Quick Ratio
Reasons for taking Markdowns
9. Promotional markdown that involves selling at or near cost for promotional purposes
Loss-Leader
Pricing Strategies: Price Lining
Cost of Goods Sold (COGS) Formula
Expense Ratio Formula
10. The number of items remaining in stock x dollar markdown
Fixed Liabilities
Markup
Return on Assets
Markdown Cancellation ($) Formula
11. Net dollar markdown/ net dollar selling price
Return on Assets (ROA) Formul
Current Ratio
Markdown Percentage Formula
Profit and Loss Statement (P&L Statement)
12. Price reduction for merchandise that has not lived up to buyers' expectations. Includes broken assortments of merchandise - merchandise lines that buyers no longer want to carry - shopworn goods - items that haven't sold because of an event beyond bu
Clearance Markdowns
Retail Inventory Method
Return on Assets
Acid test or Quick Ratio
13. The retailers financial condition at a specific point in time
Retail Price Formula
Balance Sheet
Pricing Strategies: Price Zones
Late Markdowns
14. Can be transformed simply and rapidly into cash
Markdown Optimization
Markdown Cancellation ($) Formula
Turnover Rate Formula
Current Assets
15. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
GMROII (Gross Margin Return on Inventory Investment)
Financial Leverage Ratio
Fixed Assets
Initial Markup (IMU)
16. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Return on Assets
Sell-Through Rate
Gross Margin
Retail Price Formula
17. Cost Price/ (100%-markup %)
Retail Price Formula
Return on Net Worth
GMROII (Gross Margin Return on Inventory Investment)
Reasons for taking Markdowns
18. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Cost Complement Formula
Acid Test or Quick Ratio (QR) Formula
Adage of Profitability for Retailers
Profit
19. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Off-Price Markdowns
Assets
Dollar Markdown Formula
Late Markdowns
20. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Return on Net Worth
Gross Margin
Cumulative Markup % Formula
Debt Equity Ratio Formula
21. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item
Adage of Profitability for Retailers
Acid Test or Quick Ratio (QR) Formula
Markdown
Accounts Receivable (AR)
22. Net Profit After Taxes/ Total Assets
Operating Expenses
Return on Assets (ROA) Formul
Markdown optimization
Cost Complement Formula
23. Short time - like 1 or 2 day sales
FIFO (First in - First out)
Markdown Cancellations
Off-Price Markdowns
Temporary Price Reduction
24. Dollar markup ($)/ retail price ($)
Markup % of Retail Formula
Uncontrollable Errors
Return on Assets
Markdown Cancellations
25. Financial debts incurred by a retailer
Ideal Markdown
Liabilities
Assets
Return on Assets (ROA) Formul
26. (gross margin % x Turnover) / (100%-markup %)
Gross Margin Return on Inventory Investment-GMROI Formula
Current Liabilities
Promotion Errors
Cumulative Markup
27. The energizing force that fuels and sustains our economic system
Profit
Gross Margin Return on Inventory Investment-GMROI Formula
Buying Errors
Markup % of Cost Formula
28. 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
Liabilities
Assets
Reasons for taking Markdowns
Debt Equity Ratio
29. Usually lower than original - but held for longer period
Clearance Markdowns
Regular Price
Markdown
Forced Obsolescence
30. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Net Profit
Cost of Goods Sold (COGS) Formula
Markdown Cancellations
Markdown Percentage Formula
31. Liabilities+ Owner's equity or net worth
Assets Formula
Markup % of Retail Formula
Cash Flow Formula
Promotion Errors
32. Price is changed (up or down)
Dollar Markdown Formula
Markdown Optimization
Current Ratio (CR) Formula
New Price
33. 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.
Assets
Return on Assets
Inventory
Late Markdowns
34. One that is just enough to move the goods
Ideal Markdown
Pricing Strategies: Price Ranges
Return on Assets
Acid test or Quick Ratio
35. Price Lining - price zones - price ranges
Pricing Strategies
Profit Margin Analysis Formula
Pricing Errors
Markdown Cancellations
36. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Inventory
Fixed Liabilities
Clearance Markdowns
Pricing Depends on 2 factors
37. Cash Received by the retailer-cash leaving the retailer
FIFO (First in - First out)
Financial Leverage Ratio
Cash Flow Formula
Pricing Strategies: Price Lining
38. Current Liabilites/ Net Worth
Pricing Strategies: Price Zones
Cost of Goods Sold
Debt Equity Ratio Formula
Markup % of Retail Formula
39. 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
Current Ratio
Adage of Profitability for Retailers
Cost of Goods Sold
Profit Margin
40. Dollar markup ($)/ cost price ($)
Markup % of Cost Formula
Cost Complement Formula
Gross Margin Return on Inventory Investment-GMROI Formula
Liabilities
41. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Markdown Percentage
Pricing Strategies: Price Ranges
Cumulative Markup
Markdown
42. (Cash + Accounts Receivable) / Current Liabilities
Acid Test or Quick Ratio (QR) Formula
Markdown optimization
Ideal Markdown
Adage of Profitability for Retailers
43. First price or Manufacturers suggestet Retal Price (MSRP)
Adage of Profitability for Retailers
Original Price
Pricing Strategies: Price Lining
Pricing Strategies
44. Net Profit After Taxes/ Net Worth
Cash Flow Formula
Return on Net Worth (RONW) Formula
Gross Margin
Profit Margin Analysis Formula
45. 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
Current Ratio
LIFO (last in - first out)
Markdown Cancellation ($) Formula
Expense Ratio
46. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Return on Net Worth
Cost Complement Formula
Off-Price Markdowns
Current Liabilities
47. Ranges of prices that appeals for a particular group of consumers
Gross Margin
Assets Formula
Early Markdowns
Pricing Strategies: Price Zones
48. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Late Markdowns
Cost of Goods Sold (COGS) Formula
Markdown Percentage Formula
Original Price
49. 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
Depreciation
Cumulative Markup
FIFO (First in - First out)
Return on Assets
50. 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.
Loss-Leader
Dollar Markdown Formula
Gross Margin
Promotional Markdown
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