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Test your basic knowledge |
Retail Financials
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Study First
Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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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. Revenues received by a retailer
Net Sales
Early Markdowns
Buying Errors
Markdown
2. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Return on Assets
The Cost Method
Pricing Strategies: Price Ranges
Planned Initial Markup % Formula
3. Cost + Markup
Markdown Percentage Formula
Selling Price Formula
Markdown Percentage
Buying Errors
4. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item
Markdown
Adage of Profitability for Retailers
New Price
Financial Leverage Ratio Formula
5. Dollar markup ($)/ retail price ($)
Original Price
Planned Initial Markup % Formula
Debt Equity Ratio
Markup % of Retail Formula
6. (gross margin % x Turnover) / (100%-markup %)
Pricing Strategies: Price Zones
Gross Margin Return on Inventory Investment-GMROI Formula
Late Markdowns
Acid Test or Quick Ratio (QR) Formula
7. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Fixed Assets
Current Ratio
Net Profit
Price Sensitivity
8. One that is just enough to move the goods
Balance Sheet
Liabilities
Markdown Optimization
Ideal Markdown
9. Promotional markdown that involves selling at or near cost for promotional purposes
Assets Formula
Loss-Leader
Accounts Receivable (AR)
Cumulative Markup % Formula
10. What the retailer owns in monetary value
Return on Net Worth
Pricing Strategies: Price Zones
Accounts Receivable (AR)
Assets
11. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Late Markdowns
Pricing Strategies: Price Lining
Markdown Cancellation ($) Formula
Pricing Depends on 2 factors
12. Cash Received by the retailer-cash leaving the retailer
Cash Flow Formula
Fixed Liabilities
5 Steps of Retail Inventory Method
Debt Equity Ratio Formula
13. Total Markup on all goods on hand/ retail price of all goods on hand
Current Ratio
Markdown Percentage
Cumulative Markup % Formula
Pricing Depends on 2 factors
14. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Net Profit
Return on Assets (ROA) Formul
Acid Test or Quick Ratio (QR) Formula
Pricing Strategies: Price Lining
15. Sales less cost of goods sold
Gross Margin
Markdown Cancellations
Loss-Leader
Liabilities
16. Dollar markup ($)/ cost price ($)
Fixed Assets
Profit
Markup % of Cost Formula
Original Price
17. Short time - like 1 or 2 day sales
Financial Leverage Ratio Formula
Expense Ratio Formula
Pricing Strategies: Price Ranges
Temporary Price Reduction
18. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
Markdown Optimization
Depreciation
Return on Assets (ROA) Formul
Initial Markup (IMU)
19. Net Profit After Taxes/ Total Assets
Return on Assets (ROA) Formul
Profit Margin Analysis Formula
Fixed Assets
Current Ratio
20. Evaluates the managament of capital
Regular Price
Return on Sales
Acid Test or Quick Ratio (QR) Formula
Accounts Receivable (AR)
21. Current Liabilites/ Net Worth
Inventory
Temporary Price Reduction
Off-Price Markdown Percentage Formula
Debt Equity Ratio Formula
22. Having the right merchandise - at the right time - for the right price - in the right place
Cumulative Markup
Gross Margin
Liabilities
Adage of Profitability for Retailers
23. (Cash + Accounts Receivable) / Current Liabilities
Pricing Errors
Net Profit
Planned Initial Markup % Formula
Acid Test or Quick Ratio (QR) Formula
24. The prices from lowest to highest that are carried within a merchandise category
Net Sales
Pricing Strategies: Price Ranges
Planned Initial Markup % Formula
Early Markdowns
25. Price Lining - price zones - price ranges
Cost of Goods Sold
Off-Price Markdowns
Pricing Strategies
Pricing Strategies: Price Zones
26. Costs involved in running the business
Acid Test or Quick Ratio (QR) Formula
Operating Expenses
Current Ratio
Acid test or Quick Ratio
27. Amount of markdown usually less - take the loss early will be easier - strengthen goodwill - replenish stock in lower price lines - leads to higher stock turnover - higher likelihood merchandise will sell in a timely manner
Profit Margin Analysis Formula
Price Sensitivity
Early Markdowns
Markdown Cancellation ($) Formula
28. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Ideal Markdown
Markdown
Depreciation
Cost Complement Formula
29. Usually lower than original - but held for longer period
Retail Price Formula
Regular Price
Profit Margin Analysis Formula
Balance Sheet
30. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Expense Ratio Formula
Initial Markup (IMU)
Forced Obsolescence
Return on Sales
31. 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
Debt Equity Ratio
Sell-Through Rate
Markup % of Retail Formula
Temporary Price Reduction
32. 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.
Return on Net Worth
Expense Ratio
Return on Net Worth (RONW) Formula
Clearance Markdowns
33. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Off-Price Markdown Percentage Formula
Depreciation
Temporary Price Reduction
Expense Ratio
34. Net Profit/ Net Sales
Profit Margin Analysis Formula
Markup % of Cost Formula
5 Steps of Retail Inventory Method
Markdown Cancellation ($) Formula
35. Financial debts incurred by a retailer
Cash Flow Formula
Liabilities
Markdown
Initial Markup (IMU)
36. The energizing force that fuels and sustains our economic system
Return on Net Worth (RONW) Formula
Markup
Markup % of Cost Formula
Profit
37. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Markup % of Retail Formula
Planned Initial Markup % Formula
Fixed Liabilities
Late Markdowns
38. 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.
Forced Obsolescence
Profit
Assets
Markup
39. Sales for the period/ average inventory
Turnover Rate Formula
Early Markdowns
Gross Margin Return on Inventory Investment-GMROI Formula
Retail Inventory Method
40. Total Assets/ Net Worth
Planned Initial Markup % Formula
Acid test or Quick Ratio
Financial Leverage Ratio Formula
Price Sensitivity
41. 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
Debt Equity Ratio
Net Sales
Return on Assets
The Cost Method
42. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
The Cost Method
LIFO (last in - first out)
Markdown optimization
Dollar Markdown Formula
43. The cost of merchandise that was sold (including the method that was used to determine cost)
Cost of Goods Sold
Expense Ratio Formula
Reasons for taking Markdowns
Pricing Depends on 2 factors
44. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Forced Obsolescence
Fixed Assets
Markup % of Retail Formula
Pricing Depends on 2 factors
45. Buying errors - promotion errors - pricing errors - uncontrollable errors
Cost Complement Formula
Reasons for taking Markdowns
Fixed Assets
Financial Leverage Ratio Formula
46. Cost Price/ (100%-markup %)
Retail Price Formula
Markdown Optimization
Markdown optimization
Accounts Receivable (AR)
47. 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.
Return on Assets (ROA) Formul
Selling Price Formula
Ideal Markdown
Inventory
48. First price or Manufacturers suggestet Retal Price (MSRP)
Operating Expenses
Original Price
Markdown Cancellations
Pricing Strategies: Price Zones
49. 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
Price Sensitivity
Original Price
The Cost Method
Markdown Cancellations
50. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Cost of Goods Sold
Current Assets
Return on Net Worth
Markup % of Cost Formula
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