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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. Total Markup on all goods on hand/ retail price of all goods on hand
Turnover Rate Formula
Profit and Loss Statement (P&L Statement)
Fixed Liabilities
Cumulative Markup % Formula
2. Cost + Markup
Financial Leverage Ratio Formula
Assets
Profit Margin
Selling Price Formula
3. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Cost of Goods Sold (COGS) Formula
Ideal Markdown
Off-Price Markdown Percentage Formula
Return on Net Worth
4. Price is changed (up or down)
New Price
Accounts Receivable (AR)
Retail Price Formula
Inventory
5. Revenues received by a retailer
Net Sales
Ideal Markdown
Debt Equity Ratio Formula
Pricing Strategies: Price Ranges
6. Total Expenses/ Net Sales
Current Assets
Depreciation
Expense Ratio Formula
Dollar Markdown Formula
7. (planned expenses + planned operating profit + planned stock shortages + markdowns + employee and customer discounts) / (planned net sales + stock shortages + markdowns + employee and customer discounts) x 100%
Pricing Strategies: Price Ranges
Clearance Markdowns
Temporary Price Reduction
Planned Initial Markup % Formula
8. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Current Liabilities
Pricing Strategies: Price Zones
Pricing Strategies: Price Lining
GMROII (Gross Margin Return on Inventory Investment)
9. (gross margin % x Turnover) / (100%-markup %)
Pricing Strategies: Price Zones
Markup
Cost Complement Formula
Gross Margin Return on Inventory Investment-GMROI Formula
10. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Current Liabilities
Balance Sheet
Retail Inventory Method
Return on Assets
11. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)
Promotional Markdown
Depreciation
Return on Assets
Regular Price
12. Sales for the period/ average inventory
Sell-Through Rate
Turnover Rate Formula
Price Sensitivity
Markdown Percentage
13. Net dollar markdown/ net dollar selling price
5 Steps of Retail Inventory Method
Acid test or Quick Ratio
GMROII (Gross Margin Return on Inventory Investment)
Markdown Percentage Formula
14. The retailers financial condition at a specific point in time
Dollar Markdown Formula
Markdown Percentage
New Price
Balance Sheet
15. 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
Markdown Percentage Formula
Late Markdowns
Return on Net Worth
16. (Cash + Accounts Receivable) / Current Liabilities
Turnover Rate Formula
Buying Errors
Pricing Strategies: Price Ranges
Acid Test or Quick Ratio (QR) Formula
17. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
Acid test or Quick Ratio
Cost of Goods Sold
Financial Leverage Ratio
Net Sales
18. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Initial Markup (IMU)
Current Ratio
Return on Assets
Pricing Strategies: Price Lining
19. What the retailer owns in monetary value
Assets
Retail Price Formula
Accounts Receivable (AR)
Buying Errors
20. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Gross Margin Return on Inventory Investment-GMROI Formula
Markdown Optimization
Fixed Assets
Sell-Through Rate
21. 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
Gross Margin
Markdown Cancellations
Markdown Optimization
22. Dollar markup ($)/ cost price ($)
Current Ratio
Reasons for taking Markdowns
Markup % of Cost Formula
Profit Margin
23. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Accounts Receivable (AR)
Off-Price Markdown Percentage Formula
Return on Net Worth
Retail Inventory Method
24. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Liabilities
Pricing Depends on 2 factors
Pricing Errors
Current Assets
25. Current Liabilites/ Net Worth
Cumulative Markup
Profit Margin Analysis Formula
Liabilities
Debt Equity Ratio Formula
26. Improper displays - merchandise returns due to high pressure selling
Promotion Errors
Adage of Profitability for Retailers
Current Ratio (CR) Formula
Uncontrollable Errors
27. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Fixed Liabilities
Cost of Goods Sold (COGS) Formula
Pricing Strategies: Price Lining
Cash Flow Formula
28. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Promotional Markdown
Expense Ratio
Cumulative Markup % Formula
Retail Inventory Method
29. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Current Ratio
Cost Complement Formula
Early Markdowns
Markdown optimization
30. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Cost of Goods Sold
Markdown Percentage
FIFO (First in - First out)
Return on Assets
31. 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
Buying Errors
The Cost Method
Promotional Markdown
Acid test or Quick Ratio
32. 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
Selling Price Formula
Forced Obsolescence
Cost of Goods Sold (COGS) Formula
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.
Inventory
Initial Markup (IMU)
Fixed Liabilities
Balance Sheet
34. Price Lining - price zones - price ranges
Pricing Strategies
Cost Complement Formula
Temporary Price Reduction
Fixed Assets
35. 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.
Depreciation
Current Assets
Pricing Strategies: Price Lining
Expense Ratio
36. 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
Regular Price
Original Price
FIFO (First in - First out)
37. One that is just enough to move the goods
Temporary Price Reduction
Return on Net Worth (RONW) Formula
Ideal Markdown
Pricing Strategies: Price Ranges
38. First price or Manufacturers suggestet Retal Price (MSRP)
Clearance Markdowns
Cumulative Markup % Formula
Original Price
Retail Price Formula
39. Priced too high initially - priced too low - selling price of competitors
Late Markdowns
Cost Complement Formula
Pricing Errors
Markdown Optimization
40. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit
Profit and Loss Statement (P&L Statement)
Markup
LIFO (last in - first out)
Markdown Cancellation ($) Formula
41. 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
Dollar Markdown Formula
Markup % of Retail Formula
Current Ratio
Turnover Rate Formula
42. 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
Debt Equity Ratio
Sell-Through Rate
Markdown Cancellations
43. 1. Determine merchandise available for sale at both cost and retail prices. 2.Calculate the cost to retail complement or percentage relationship of the cost of merchandise to the selling price. 3. Subtract markdowns taken during the period. 4. Determ
5 Steps of Retail Inventory Method
The Cost Method
Buying Errors
Financial Leverage Ratio
44. Net Profit After Taxes/ Net Worth
Net Profit
Liabilities
Promotional Markdown
Return on Net Worth (RONW) Formula
45. Current Assets/ Current Liabilities
Markdown Percentage
Pricing Strategies: Price Ranges
Current Ratio (CR) Formula
Pricing Strategies
46. Liabilities+ Owner's equity or net worth
Financial Leverage Ratio
Markup
Assets Formula
Pricing Strategies: Price Zones
47. The cost of merchandise that was sold (including the method that was used to determine cost)
Gross Margin
Off-Price Markdowns
Return on Assets (ROA) Formul
Cost of Goods Sold
48. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
The Cost Method
Ideal Markdown
Inventory
Net Profit
49. 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.
Markdown Optimization
Late Markdowns
Selling Price Formula
Net Sales
50. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Markdown optimization
Depreciation
Cumulative Markup
Pricing Strategies: Price Ranges