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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
Sell-Through Rate
Operating Expenses
Pricing Strategies: Price Ranges
Debt Equity Ratio Formula
2. The prices from lowest to highest that are carried within a merchandise category
Markdown Optimization
Original Price
Assets
Pricing Strategies: Price Ranges
3. 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.
Financial Leverage Ratio
Pricing Strategies: Price Ranges
Late Markdowns
Fixed Assets
4. Net Profit After Taxes/ Total Assets
Off-Price Markdown Percentage Formula
Return on Assets (ROA) Formul
Original Price
Debt Equity Ratio Formula
5. Liabilities+ Owner's equity or net worth
Assets Formula
Markup % of Cost Formula
5 Steps of Retail Inventory Method
Forced Obsolescence
6. Ranges of prices that appeals for a particular group of consumers
Fixed Liabilities
Clearance Markdowns
Pricing Strategies: Price Zones
Acid Test or Quick Ratio (QR) Formula
7. 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.
Net Profit
Profit Margin
Expense Ratio
Inventory
8. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Markdown Cancellation ($) Formula
Pricing Strategies: Price Ranges
Initial Markup (IMU)
Pricing Strategies: Price Lining
9. To make a profit buyers must set an appropriate price considering many variables and using past experience and knowledge of future trends. A markup on an item does not typically remain constant.
Markup
Cash Flow Formula
Pricing Strategies: Price Ranges
Promotion Errors
10. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Acid test or Quick Ratio
Retail Inventory Method
Liabilities
Reasons for taking Markdowns
11. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Markdown Percentage Formula
Cost Complement Formula
Net Sales
Expense Ratio
12. Having the right merchandise - at the right time - for the right price - in the right place
GMROII (Gross Margin Return on Inventory Investment)
Adage of Profitability for Retailers
Financial Leverage Ratio
LIFO (last in - first out)
13. Cost + Markup
Price Sensitivity
Selling Price Formula
Financial Leverage Ratio
New Price
14. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented.
Sell-Through Rate
Current Liabilities
Markdown Optimization
Cumulative Markup % Formula
15. Dollar markup ($)/ cost price ($)
Cost of Goods Sold
Markup % of Cost Formula
Depreciation
Off-Price Markdowns
16. 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
Operating Expenses
Debt Equity Ratio Formula
Promotion Errors
17. 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
Price Sensitivity
Debt Equity Ratio
The Cost Method
Fixed Assets
18. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Acid Test or Quick Ratio (QR) Formula
Inventory
Return on Assets
Markdown Cancellations
19. Net Profit/ Net Sales
Assets Formula
Debt Equity Ratio
Current Assets
Profit Margin Analysis Formula
20. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)
5 Steps of Retail Inventory Method
Expense Ratio
Fixed Assets
Depreciation
21. Current Liabilites/ Net Worth
Forced Obsolescence
Markdown Optimization
Debt Equity Ratio Formula
New Price
22. 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
Cumulative Markup
Markdown optimization
The Cost Method
Current Ratio (CR) Formula
23. 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
Ideal Markdown
Sell-Through Rate
Retail Price Formula
Turnover Rate Formula
24. Promotional markdown that involves selling at or near cost for promotional purposes
Loss-Leader
Accounts Receivable (AR)
Pricing Strategies
Pricing Strategies: Price Ranges
25. Original Retail price- markdown selling price
Profit
Pricing Depends on 2 factors
Profit Margin
Dollar Markdown Formula
26. Revenues received by a retailer
Pricing Strategies: Price Zones
Net Profit
Late Markdowns
Net Sales
27. Net Profit After Taxes/ Net Worth
Planned Initial Markup % Formula
Debt Equity Ratio Formula
Return on Net Worth (RONW) Formula
Temporary Price Reduction
28. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Off-Price Markdown Percentage Formula
Pricing Strategies
Clearance Markdowns
Accounts Receivable (AR)
29. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Markdown Percentage
Adage of Profitability for Retailers
Promotional Markdown
Depreciation
30. Evaluates the managament of capital
Inventory
Sell-Through Rate
Return on Sales
Current Liabilities
31. 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.
Expense Ratio
Pricing Strategies: Price Lining
Inventory
New Price
32. 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
Net Profit
Pricing Errors
Net Sales
33. Total Assets/ Net Worth
Liabilities
Cost Complement Formula
Regular Price
Financial Leverage Ratio Formula
34. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Pricing Strategies: Price Lining
Buying Errors
The Cost Method
Return on Net Worth (RONW) Formula
35. Sales for the period/ average inventory
Pricing Errors
Turnover Rate Formula
Operating Expenses
Net Sales
36. Price Lining - price zones - price ranges
Dollar Markdown Formula
Pricing Strategies
Pricing Strategies: Price Ranges
Debt Equity Ratio
37. Improper displays - merchandise returns due to high pressure selling
Profit Margin
Promotion Errors
Current Ratio
5 Steps of Retail Inventory Method
38. First price or Manufacturers suggestet Retal Price (MSRP)
Original Price
Reasons for taking Markdowns
Cost Complement Formula
Return on Assets (ROA) Formul
39. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
New Price
Fixed Liabilities
Selling Price Formula
Profit Margin Analysis Formula
40. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Current Liabilities
Fixed Assets
Profit
Inventory
41. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Debt Equity Ratio Formula
Dollar Markdown Formula
Buying Errors
Return on Net Worth
42. 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 and Loss Statement (P&L Statement)
Profit Margin
Selling Price Formula
Markup % of Cost Formula
43. What the retailer owns in monetary value
Cash Flow Formula
Financial Leverage Ratio Formula
LIFO (last in - first out)
Assets
44. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Cost of Goods Sold
Loss-Leader
Off-Price Markdown Percentage Formula
Markdown optimization
45. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Financial Leverage Ratio Formula
Initial Markup (IMU)
Forced Obsolescence
Liabilities
46. 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
Promotion Errors
5 Steps of Retail Inventory Method
LIFO (last in - first out)
Fixed Assets
47. Cash Received by the retailer-cash leaving the retailer
Current Ratio
Cost of Goods Sold (COGS) Formula
Expense Ratio Formula
Cash Flow Formula
48. 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
Cost of Goods Sold (COGS) Formula
Markup % of Retail Formula
Current Ratio
Fixed Assets
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
Operating Expenses
Markup
Profit and Loss Statement (P&L Statement)
Pricing Strategies: Price Zones
50. 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.
Retail Price Formula
Late Markdowns
Accounts Receivable (AR)
Liabilities