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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. (Cash + Accounts Receivable) / Current Liabilities
Acid Test or Quick Ratio (QR) Formula
Expense Ratio
FIFO (First in - First out)
Markup % of Retail Formula
2. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Depreciation
Gross Margin
Promotional Markdown
Current Liabilities
3. Current Liabilites/ Net Worth
Early Markdowns
Markdown Optimization
Balance Sheet
Debt Equity Ratio Formula
4. Sales less cost of goods sold
Gross Margin
Reasons for taking Markdowns
Pricing Errors
Fixed Assets
5. Buying errors - promotion errors - pricing errors - uncontrollable errors
Reasons for taking Markdowns
Financial Leverage Ratio Formula
Off-Price Markdown Percentage Formula
Balance Sheet
6. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Net Sales
New Price
Cost of Goods Sold (COGS) Formula
Markup % of Cost Formula
7. Cost + Markup
The Cost Method
Ideal Markdown
Selling Price Formula
Price Sensitivity
8. 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.
Uncontrollable Errors
Planned Initial Markup % Formula
Regular Price
Expense Ratio
9. Ranges of prices that appeals for a particular group of consumers
Liabilities
Markdown
Pricing Strategies: Price Zones
GMROII (Gross Margin Return on Inventory Investment)
10. 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
Profit Margin
Markdown Percentage Formula
Pricing Strategies: Price Zones
11. 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
FIFO (First in - First out)
Profit and Loss Statement (P&L Statement)
Markdown Optimization
Return on Net Worth
12. 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
Pricing Strategies: Price Ranges
Early Markdowns
Loss-Leader
Profit Margin
13. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Markdown Optimization
Net Profit
Markup % of Retail Formula
Planned Initial Markup % Formula
14. 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.
Operating Expenses
Markdown Percentage
Markdown
Accounts Receivable (AR)
15. The cost of merchandise that was sold (including the method that was used to determine cost)
Regular Price
Markdown Percentage
Promotional Markdown
Cost of Goods Sold
16. Net Profit/ Net Sales
Assets Formula
Profit Margin Analysis Formula
Pricing Strategies: Price Ranges
Forced Obsolescence
17. Net Profit After Taxes/ Total Assets
Early Markdowns
Dollar Markdown Formula
Cumulative Markup % Formula
Return on Assets (ROA) Formul
18. 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.
Promotional Markdown
Retail Price Formula
Return on Sales
Gross Margin Return on Inventory Investment-GMROI Formula
19. Improper displays - merchandise returns due to high pressure selling
Financial Leverage Ratio Formula
Dollar Markdown Formula
Gross Margin
Promotion Errors
20. Original Retail price- markdown selling price
Buying Errors
Ideal Markdown
Clearance Markdowns
Dollar Markdown Formula
21. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)
Cost Complement Formula
Forced Obsolescence
5 Steps of Retail Inventory Method
Depreciation
22. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Retail Price Formula
Markdown Cancellations
Turnover Rate Formula
Profit Margin
23. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Depreciation
Financial Leverage Ratio
Markdown Percentage
Fixed Assets
24. The weather - merchandise is shopworn - economic downturn
Forced Obsolescence
Uncontrollable Errors
Return on Assets (ROA) Formul
Return on Net Worth
25. Total Markup on all goods on hand/ retail price of all goods on hand
Profit Margin
Depreciation
Return on Sales
Cumulative Markup % Formula
26. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Markdown Optimization
Retail Inventory Method
Cumulative Markup % Formula
Profit Margin Analysis Formula
27. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Cash Flow Formula
Current Ratio
Buying Errors
Temporary Price Reduction
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.
Markdown Optimization
The Cost Method
Expense Ratio Formula
Price Sensitivity
29. Revenues received by a retailer
Cost of Goods Sold
Net Sales
Operating Expenses
Retail Price Formula
30. 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
Profit Margin
Planned Initial Markup % Formula
Gross Margin
Ideal Markdown
31. Having the right merchandise - at the right time - for the right price - in the right place
Pricing Strategies
Cost of Goods Sold (COGS) Formula
Markdown Optimization
Adage of Profitability for Retailers
32. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item
Markdown Cancellation ($) Formula
Cumulative Markup
Regular Price
Markdown
33. The largest sum of money in current assets. Can be presented in either cost or retail terms. Should be purchased for a short period of time - as products lose monetary value over time and are subject to markdowns.
Expense Ratio
Dollar Markdown Formula
Promotional Markdown
Inventory
34. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Cash Flow Formula
Fixed Liabilities
Fixed Assets
Depreciation
35. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Markup % of Cost Formula
Pricing Strategies: Price Lining
Markdown Optimization
Adage of Profitability for Retailers
36. Examines the financial health of a retailer - as one of the best indicators of having too much debt in relationship to net worth. Comparres the money that vendors or banks are risking with the money that the retail owners have invested in their opera
Markdown Optimization
Return on Net Worth
Clearance Markdowns
Debt Equity Ratio
37. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Uncontrollable Errors
Cost of Goods Sold (COGS) Formula
Regular Price
Forced Obsolescence
38. Dollar markup ($)/ retail price ($)
Net Profit
Ideal Markdown
Cost Complement Formula
Markup % of Retail Formula
39. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Acid test or Quick Ratio
Return on Net Worth
Financial Leverage Ratio Formula
Markdown Percentage
40. The number of items remaining in stock x dollar markdown
Current Liabilities
Markup % of Cost Formula
Debt Equity Ratio
Markdown Cancellation ($) Formula
41. Priced too high initially - priced too low - selling price of competitors
Profit and Loss Statement (P&L Statement)
Debt Equity Ratio Formula
Pricing Depends on 2 factors
Pricing Errors
42. One that is just enough to move the goods
Gross Margin
Reasons for taking Markdowns
Markup % of Retail Formula
Ideal Markdown
43. 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.
Cash Flow Formula
Acid test or Quick Ratio
Clearance Markdowns
Current Ratio (CR) Formula
44. 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
Turnover Rate Formula
Expense Ratio
Price Sensitivity
Markup % of Retail Formula
45. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Cost Complement Formula
Return on Sales
Markdown Percentage
Debt Equity Ratio
46. Cost Price/ (100%-markup %)
Turnover Rate Formula
Markup % of Retail Formula
Cumulative Markup % Formula
Retail Price Formula
47. (gross margin % x Turnover) / (100%-markup %)
Early Markdowns
Temporary Price Reduction
Buying Errors
Gross Margin Return on Inventory Investment-GMROI Formula
48. Total Assets/ Net Worth
Accounts Receivable (AR)
LIFO (last in - first out)
Financial Leverage Ratio Formula
Price Sensitivity
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
Pricing Strategies
Return on Assets
Profit and Loss Statement (P&L Statement)
Late Markdowns
50. Net dollar markdown/ net dollar selling price
Early Markdowns
Markdown Percentage Formula
Debt Equity Ratio
Temporary Price Reduction
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