SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
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. 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
5 Steps of Retail Inventory Method
GMROII (Gross Margin Return on Inventory Investment)
Gross Margin Return on Inventory Investment-GMROI Formula
Current Ratio (CR) Formula
2. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Markup % of Retail Formula
New Price
Current Ratio
Pricing Strategies: Price Lining
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.
Turnover Rate Formula
Return on Net Worth
Inventory
Markdown Cancellation ($) Formula
4. Price is changed (up or down)
Markup % of Retail Formula
New Price
Markdown Cancellations
Cash Flow Formula
5. Liabilities+ Owner's equity or net worth
Pricing Strategies: Price Ranges
Fixed Assets
Current Ratio
Assets Formula
6. The prices from lowest to highest that are carried within a merchandise category
Return on Net Worth (RONW) Formula
Pricing Strategies: Price Ranges
Accounts Receivable (AR)
Clearance Markdowns
7. Financial debts incurred by a retailer
Cash Flow Formula
Expense Ratio
Liabilities
Profit and Loss Statement (P&L Statement)
8. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Markdown
Cumulative Markup
Financial Leverage Ratio Formula
Expense Ratio Formula
9. Can be transformed simply and rapidly into cash
Current Assets
Cash Flow Formula
Pricing Strategies
Fixed Liabilities
10. Buying errors - promotion errors - pricing errors - uncontrollable errors
Reasons for taking Markdowns
Markdown Percentage
Cumulative Markup
Financial Leverage Ratio Formula
11. Having the right merchandise - at the right time - for the right price - in the right place
Fixed Liabilities
Markdown Cancellations
Adage of Profitability for Retailers
Profit and Loss Statement (P&L Statement)
12. Cost + Markup
Selling Price Formula
Return on Net Worth (RONW) Formula
Profit and Loss Statement (P&L Statement)
LIFO (last in - first out)
13. Dollar markup ($)/ cost price ($)
Return on Assets
Markup % of Cost Formula
Regular Price
Promotional Markdown
14. 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
Original Price
Cost of Goods Sold (COGS) Formula
Debt Equity Ratio
Depreciation
15. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Regular Price
Ideal Markdown
Balance Sheet
Forced Obsolescence
16. Short time - like 1 or 2 day sales
Cumulative Markup
Markup
Pricing Strategies
Temporary Price Reduction
17. Improper displays - merchandise returns due to high pressure selling
Late Markdowns
Reasons for taking Markdowns
Promotion Errors
Markup % of Cost Formula
18. Net Profit/ Net Sales
Current Ratio (CR) Formula
FIFO (First in - First out)
Pricing Strategies: Price Zones
Profit Margin Analysis Formula
19. The energizing force that fuels and sustains our economic system
Profit
Debt Equity Ratio Formula
Off-Price Markdown Percentage Formula
Acid test or Quick Ratio
20. Evaluates the managament of capital
Profit Margin Analysis Formula
Profit Margin
Return on Sales
Cumulative Markup
21. Ranges of prices that appeals for a particular group of consumers
Regular Price
Depreciation
Pricing Strategies: Price Zones
Loss-Leader
22. 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.
Markdown Cancellations
Markup % of Retail Formula
Promotional Markdown
Markdown Percentage
23. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Uncontrollable Errors
Return on Net Worth
Liabilities
Pricing Strategies: Price Zones
24. Cost Price/ (100%-markup %)
Acid test or Quick Ratio
Pricing Strategies: Price Ranges
Retail Price Formula
Liabilities
25. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Reasons for taking Markdowns
Markdown Cancellation ($) Formula
Cost of Goods Sold (COGS) Formula
Current Assets
26. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
The Cost Method
Early Markdowns
Financial Leverage Ratio
Original Price
27. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Depreciation
Fixed Liabilities
Uncontrollable Errors
Expense Ratio Formula
28. The weather - merchandise is shopworn - economic downturn
Uncontrollable Errors
Depreciation
Return on Net Worth (RONW) Formula
Pricing Strategies
29. Current Assets/ Current Liabilities
GMROII (Gross Margin Return on Inventory Investment)
Balance Sheet
Cumulative Markup
Current Ratio (CR) Formula
30. First price or Manufacturers suggestet Retal Price (MSRP)
Inventory
Clearance Markdowns
Retail Inventory Method
Original Price
31. Price Lining - price zones - price ranges
Off-Price Markdowns
Pricing Strategies
Inventory
Current Ratio
32. The number of items remaining in stock x dollar markdown
Cash Flow Formula
Off-Price Markdown Percentage Formula
Assets Formula
Markdown Cancellation ($) Formula
33. What the retailer owns in monetary value
Assets
Adage of Profitability for Retailers
Current Ratio
Financial Leverage Ratio Formula
34. Priced too high initially - priced too low - selling price of competitors
Pricing Errors
Ideal Markdown
Original Price
Early Markdowns
35. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented.
Promotion Errors
Markdown Optimization
Current Ratio (CR) Formula
Return on Net Worth (RONW) Formula
36. Net Profit After Taxes/ Total Assets
Assets
Depreciation
Return on Assets (ROA) Formul
Pricing Strategies: Price Lining
37. Total Expenses/ Net Sales
Regular Price
Clearance Markdowns
Ideal Markdown
Expense Ratio Formula
38. Promotional markdown that involves selling at or near cost for promotional purposes
Debt Equity Ratio
Return on Net Worth (RONW) Formula
Loss-Leader
Financial Leverage Ratio
39. Net dollar markdown/ net dollar selling price
Fixed Assets
Current Ratio (CR) Formula
Pricing Strategies: Price Zones
Markdown Percentage Formula
40. Current Liabilites/ Net Worth
Operating Expenses
Depreciation
Debt Equity Ratio Formula
Inventory
41. Assets collected within one year. Due to the widespread use of credit cards - AR for retailers has diminished with exceptions such as lay-a-way.
Cost of Goods Sold
Assets
Late Markdowns
Accounts Receivable (AR)
42. The higher the ratio the quicker current liabilities can be paid. This ratio also indicates the margin of safety a retailer has on hand to cover possible shrinkages
Acid test or Quick Ratio
Current Ratio
Markdown Cancellations
Adage of Profitability for Retailers
43. (Cash + Accounts Receivable) / Current Liabilities
Acid Test or Quick Ratio (QR) Formula
Return on Assets
New Price
Promotion Errors
44. Dollar markup ($)/ retail price ($)
Off-Price Markdowns
Pricing Strategies
Markup % of Retail Formula
Expense Ratio
45. 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.
Promotional Markdown
Markup
Clearance Markdowns
Pricing Strategies: Price Ranges
46. 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
Planned Initial Markup % Formula
Pricing Errors
The Cost Method
Markdown
47. 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)
Promotion Errors
Cumulative Markup
Liabilities
48. 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.
Uncontrollable Errors
Acid test or Quick Ratio
Expense Ratio Formula
Current Liabilities
49. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Cost Complement Formula
Acid Test or Quick Ratio (QR) Formula
5 Steps of Retail Inventory Method
Financial Leverage Ratio Formula
50. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Profit and Loss Statement (P&L Statement)
Off-Price Markdown Percentage Formula
Dollar Markdown Formula
Pricing Depends on 2 factors