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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. Costs involved in running the business
Fixed Assets
Operating Expenses
Gross Margin Return on Inventory Investment-GMROI Formula
Adage of Profitability for Retailers
2. First price or Manufacturers suggestet Retal Price (MSRP)
Current Liabilities
Original Price
Net Sales
Markup
3. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Return on Net Worth
Promotional Markdown
Sell-Through Rate
Off-Price Markdown Percentage Formula
4. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Return on Net Worth
Adage of Profitability for Retailers
Off-Price Markdown Percentage Formula
Cumulative Markup
5. 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.
Acid test or Quick Ratio
Financial Leverage Ratio Formula
Pricing Errors
Current Liabilities
6. Improper displays - merchandise returns due to high pressure selling
Markup
Promotion Errors
Turnover Rate Formula
Debt Equity Ratio Formula
7. Cost Price/ (100%-markup %)
Current Ratio (CR) Formula
Cash Flow Formula
Net Sales
Retail Price Formula
8. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Gross Margin Return on Inventory Investment-GMROI Formula
Markdown Percentage
Gross Margin
Sell-Through Rate
9. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Pricing Strategies: Price Ranges
Cumulative Markup
Ideal Markdown
Return on Assets
10. Evaluates the managament of capital
GMROII (Gross Margin Return on Inventory Investment)
Cost of Goods Sold
Pricing Errors
Return on Sales
11. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Early Markdowns
Assets
Return on Net Worth (RONW) Formula
Pricing Strategies: Price Lining
12. 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
Financial Leverage Ratio Formula
Current Ratio
Current Liabilities
Sell-Through Rate
13. Dollar markup ($)/ cost price ($)
Markup % of Cost Formula
Assets Formula
Temporary Price Reduction
Markdown optimization
14. Original Retail price- markdown selling price
Dollar Markdown Formula
Expense Ratio
Markup % of Cost Formula
Acid test or Quick Ratio
15. Total Expenses/ Net Sales
Return on Assets (ROA) Formul
Liabilities
Expense Ratio Formula
Fixed Assets
16. Promotional markdown that involves selling at or near cost for promotional purposes
Uncontrollable Errors
Financial Leverage Ratio Formula
Return on Assets
Loss-Leader
17. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Markup % of Cost Formula
FIFO (First in - First out)
Markdown Cancellations
Regular Price
18. Price is changed (up or down)
Markup
Expense Ratio Formula
New Price
Current Liabilities
19. 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
Off-Price Markdown Percentage Formula
Return on Assets
Depreciation
Profit Margin
20. One that is just enough to move the goods
Profit and Loss Statement (P&L Statement)
Assets
Ideal Markdown
Turnover Rate Formula
21. 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
Price Sensitivity
Cumulative Markup % Formula
Gross Margin
Debt Equity Ratio
22. The prices from lowest to highest that are carried within a merchandise category
Markup % of Cost Formula
Net Sales
Pricing Strategies: Price Ranges
Expense Ratio Formula
23. 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
Markdown Percentage
FIFO (First in - First out)
Pricing Strategies: Price Lining
Assets
24. 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.
Balance Sheet
Pricing Strategies: Price Ranges
Forced Obsolescence
Accounts Receivable (AR)
25. Can be transformed simply and rapidly into cash
Ideal Markdown
Current Assets
Return on Net Worth
Loss-Leader
26. Dollar markup ($)/ retail price ($)
Current Assets
Financial Leverage Ratio
Off-Price Markdown Percentage Formula
Markup % of Retail Formula
27. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
Off-Price Markdown Percentage Formula
Financial Leverage Ratio
Net Profit
Price Sensitivity
28. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Depreciation
Profit Margin
Retail Price Formula
Markdown optimization
29. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Current Assets
Retail Inventory Method
Reasons for taking Markdowns
Sell-Through Rate
30. The energizing force that fuels and sustains our economic system
Reasons for taking Markdowns
Acid test or Quick Ratio
Off-Price Markdown Percentage Formula
Profit
31. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Profit and Loss Statement (P&L Statement)
5 Steps of Retail Inventory Method
Pricing Depends on 2 factors
Profit
32. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
Pricing Strategies: Price Zones
Selling Price Formula
Initial Markup (IMU)
Buying Errors
33. Short time - like 1 or 2 day sales
Inventory
Temporary Price Reduction
Assets Formula
Selling Price Formula
34. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)
Cost of Goods Sold
Depreciation
Profit
Forced Obsolescence
35. What the retailer owns in monetary value
Late Markdowns
Cost of Goods Sold (COGS) Formula
Markdown Cancellation ($) Formula
Assets
36. Financial debts incurred by a retailer
Current Ratio
Debt Equity Ratio
Liabilities
Late Markdowns
37. Merchandise Available for sale at cost/ Merchandise available for sale at retail
GMROII (Gross Margin Return on Inventory Investment)
Cost Complement Formula
Markdown Percentage
Markdown Optimization
38. Cost + Markup
Financial Leverage Ratio
Ideal Markdown
Profit Margin Analysis Formula
Selling Price Formula
39. Sales less cost of goods sold
Net Profit
Markdown Cancellations
Off-Price Markdown Percentage Formula
Gross Margin
40. Total Markup on all goods on hand/ retail price of all goods on hand
Reasons for taking Markdowns
Return on Net Worth (RONW) Formula
Dollar Markdown Formula
Cumulative Markup % Formula
41. Price Lining - price zones - price ranges
Balance Sheet
Pricing Strategies
Initial Markup (IMU)
Promotional Markdown
42. Net Profit After Taxes/ Net Worth
Return on Net Worth (RONW) Formula
Net Profit
Pricing Errors
Depreciation
43. 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
Expense Ratio
Current Ratio
Markdown Optimization
Financial Leverage Ratio
44. Cash Received by the retailer-cash leaving the retailer
Promotional Markdown
Original Price
Cash Flow Formula
Planned Initial Markup % Formula
45. The retailers financial condition at a specific point in time
Depreciation
Balance Sheet
Current Assets
Acid test or Quick Ratio
46. Usually lower than original - but held for longer period
Regular Price
Current Ratio
Assets
New Price
47. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Markup % of Retail Formula
Retail Inventory Method
Return on Net Worth
Buying Errors
48. 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.
Late Markdowns
Net Sales
Expense Ratio Formula
Turnover Rate Formula
49. Current Assets/ Current Liabilities
Gross Margin
Turnover Rate Formula
Current Ratio (CR) Formula
Cost of Goods Sold (COGS) Formula
50. 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
Early Markdowns
Turnover Rate Formula
Markdown Optimization
Liabilities