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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. 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
Return on Sales
Price Sensitivity
Retail Price Formula
Cost of Goods Sold
2. Cost Price/ (100%-markup %)
Markdown Optimization
Retail Price Formula
Pricing Errors
Turnover Rate Formula
3. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Pricing Strategies: Price Lining
Pricing Depends on 2 factors
Acid test or Quick Ratio
Off-Price Markdown Percentage Formula
4. Dollar markup ($)/ retail price ($)
Inventory
Reasons for taking Markdowns
Markup % of Retail Formula
Temporary Price Reduction
5. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Markdown Percentage
Cumulative Markup % Formula
Profit
Acid test or Quick Ratio
6. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Gross Margin
Reasons for taking Markdowns
Buying Errors
Fixed Liabilities
7. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Financial Leverage Ratio Formula
Retail Inventory Method
Cost of Goods Sold
Cost Complement Formula
8. Ranges of prices that appeals for a particular group of consumers
Return on Assets
Reasons for taking Markdowns
Sell-Through Rate
Pricing Strategies: Price Zones
9. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Pricing Errors
Markdown optimization
Assets Formula
Profit Margin
10. (gross margin % x Turnover) / (100%-markup %)
Temporary Price Reduction
Gross Margin Return on Inventory Investment-GMROI Formula
Return on Sales
Regular Price
11. Current Assets/ Current Liabilities
Current Ratio (CR) Formula
Cash Flow Formula
Dollar Markdown Formula
Turnover Rate Formula
12. Original Retail price- markdown selling price
GMROII (Gross Margin Return on Inventory Investment)
Markup
Profit Margin
Dollar Markdown Formula
13. 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
Accounts Receivable (AR)
Forced Obsolescence
Late Markdowns
The Cost Method
14. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Operating Expenses
Cost of Goods Sold
Markdown Cancellations
Buying Errors
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
Debt Equity Ratio
Markdown Percentage Formula
Liabilities
Early Markdowns
16. 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
Current Liabilities
Debt Equity Ratio
Markdown optimization
17. Net Profit After Taxes/ Total Assets
Acid test or Quick Ratio
Uncontrollable Errors
Sell-Through Rate
Return on Assets (ROA) Formul
18. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit
Markdown
Current Assets
Liabilities
Profit and Loss Statement (P&L Statement)
19. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Cumulative Markup
Dollar Markdown Formula
Depreciation
Markdown Percentage Formula
20. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
New Price
Off-Price Markdowns
Markdown Cancellations
Markdown Cancellation ($) Formula
21. Total Markup on all goods on hand/ retail price of all goods on hand
New Price
LIFO (last in - first out)
Depreciation
Cumulative Markup % Formula
22. Sales for the period/ average inventory
Clearance Markdowns
Cost Complement Formula
Turnover Rate Formula
Pricing Strategies: Price Lining
23. (Cash + Accounts Receivable) / Current Liabilities
Adage of Profitability for Retailers
Acid Test or Quick Ratio (QR) Formula
Markdown optimization
Promotional Markdown
24. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Pricing Depends on 2 factors
Markdown Cancellations
Fixed Assets
Financial Leverage Ratio Formula
25. Total Assets/ Net Worth
Cash Flow Formula
Fixed Liabilities
Net Profit
Financial Leverage Ratio Formula
26. 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
Profit Margin Analysis Formula
Debt Equity Ratio
Current Liabilities
Gross Margin Return on Inventory Investment-GMROI Formula
27. One that is just enough to move the goods
Ideal Markdown
Pricing Strategies: Price Lining
Clearance Markdowns
Markdown optimization
28. Having the right merchandise - at the right time - for the right price - in the right place
5 Steps of Retail Inventory Method
Adage of Profitability for Retailers
Depreciation
Pricing Strategies: Price Zones
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.
Markdown Optimization
Pricing Strategies: Price Lining
Liabilities
Cost of Goods Sold
30. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
Balance Sheet
Late Markdowns
Markup % of Retail Formula
Initial Markup (IMU)
31. (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%
LIFO (last in - first out)
Return on Assets (ROA) Formul
New Price
Planned Initial Markup % Formula
32. Promotional markdown that involves selling at or near cost for promotional purposes
Gross Margin
Temporary Price Reduction
Debt Equity Ratio Formula
Loss-Leader
33. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Return on Sales
Clearance Markdowns
Financial Leverage Ratio
Return on Assets
34. Priced too high initially - priced too low - selling price of competitors
Selling Price Formula
Late Markdowns
Pricing Errors
Net Profit
35. Total Expenses/ Net Sales
Profit
Pricing Depends on 2 factors
Selling Price Formula
Expense Ratio Formula
36. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Accounts Receivable (AR)
Off-Price Markdowns
Return on Net Worth
Markdown Cancellation ($) Formula
37. Financial debts incurred by a retailer
Pricing Errors
Financial Leverage Ratio Formula
Liabilities
Buying Errors
38. Improper displays - merchandise returns due to high pressure selling
Promotion Errors
Assets
Acid Test or Quick Ratio (QR) Formula
Turnover Rate Formula
39. 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.
Markdown optimization
5 Steps of Retail Inventory Method
Ideal Markdown
Markup
40. Price reduction for merchandise that has not lived up to buyers' expectations. Includes broken assortments of merchandise - merchandise lines that buyers no longer want to carry - shopworn goods - items that haven't sold because of an event beyond bu
Balance Sheet
Expense Ratio Formula
Cumulative Markup
Clearance Markdowns
41. The weather - merchandise is shopworn - economic downturn
Markdown Optimization
Uncontrollable Errors
Fixed Liabilities
Markdown optimization
42. 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.
Cost of Goods Sold
Original Price
Late Markdowns
Markdown Percentage
43. Buying errors - promotion errors - pricing errors - uncontrollable errors
Reasons for taking Markdowns
Financial Leverage Ratio
Markdown Cancellations
Markdown optimization
44. Revenues received by a retailer
Expense Ratio Formula
Net Sales
Assets Formula
Off-Price Markdowns
45. 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.
Markdown Cancellations
Gross Margin
Pricing Strategies
Accounts Receivable (AR)
46. Cash Received by the retailer-cash leaving the retailer
Selling Price Formula
Forced Obsolescence
Expense Ratio Formula
Cash Flow Formula
47. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
New Price
Financial Leverage Ratio Formula
Uncontrollable Errors
Pricing Strategies: Price Lining
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
Markup % of Cost Formula
Acid test or Quick Ratio
Current Ratio
Clearance Markdowns
49. The retailers financial condition at a specific point in time
Depreciation
Profit and Loss Statement (P&L Statement)
Operating Expenses
Balance Sheet
50. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Current Assets
Off-Price Markdown Percentage Formula
Promotion Errors
Markdown Cancellations