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. 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)
Promotion Errors
Operating Expenses
Cumulative Markup
2. What the retailer owns in monetary value
Markdown
Expense Ratio
Markdown Cancellation ($) Formula
Assets
3. Revenues received by a retailer
Net Sales
Cost of Goods Sold (COGS) Formula
Current Assets
Liabilities
4. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)
Profit Margin
Depreciation
Uncontrollable Errors
Buying Errors
5. Can be transformed simply and rapidly into cash
Liabilities
Gross Margin Return on Inventory Investment-GMROI Formula
Debt Equity Ratio
Current Assets
6. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Markdown Percentage
Markdown Cancellation ($) Formula
Forced Obsolescence
Clearance Markdowns
7. In Cost Method. Merchandise sold during a time period is assumed to be sold in the order the merchandise was received. Merchandise on hand for the longest period of time is sold first. Therefore - the ending inventory reflects the items in stock for
Temporary Price Reduction
Markup % of Retail Formula
FIFO (First in - First out)
5 Steps of Retail Inventory Method
8. Total Markup on all goods on hand/ retail price of all goods on hand
Temporary Price Reduction
Cumulative Markup % Formula
Pricing Strategies: Price Lining
Fixed Liabilities
9. 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
Return on Assets
Profit Margin
FIFO (First in - First out)
Return on Sales
10. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
5 Steps of Retail Inventory Method
Clearance Markdowns
Acid test or Quick Ratio
Pricing Depends on 2 factors
11. Current Liabilites/ Net Worth
Debt Equity Ratio Formula
Markdown Optimization
The Cost Method
Cash Flow Formula
12. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Pricing Strategies: Price Lining
Balance Sheet
Retail Price Formula
Cost of Goods Sold (COGS) Formula
13. 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 Cancellation ($) Formula
Operating Expenses
Promotional Markdown
Turnover Rate Formula
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
Markdown optimization
Profit and Loss Statement (P&L Statement)
Adage of Profitability for Retailers
Acid Test or Quick Ratio (QR) Formula
15. 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.
5 Steps of Retail Inventory Method
Uncontrollable Errors
Debt Equity Ratio
Accounts Receivable (AR)
16. Total Assets/ Net Worth
Acid Test or Quick Ratio (QR) Formula
Selling Price Formula
Pricing Strategies: Price Zones
Financial Leverage Ratio Formula
17. 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
Financial Leverage Ratio Formula
Markdown Optimization
Markup % of Retail Formula
18. The cost of merchandise that was sold (including the method that was used to determine cost)
Retail Inventory Method
Return on Net Worth (RONW) Formula
Cost of Goods Sold
Markup % of Retail Formula
19. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Return on Net Worth
Promotion Errors
Original Price
Profit
20. Short time - like 1 or 2 day sales
Cumulative Markup % Formula
Temporary Price Reduction
Profit
Current Assets
21. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Operating Expenses
Buying Errors
FIFO (First in - First out)
Assets Formula
22. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Return on Assets
Assets Formula
Clearance Markdowns
Markdown
23. Buying errors - promotion errors - pricing errors - uncontrollable errors
Turnover Rate Formula
Cash Flow Formula
Financial Leverage Ratio
Reasons for taking Markdowns
24. Price is changed (up or down)
Cost of Goods Sold (COGS) Formula
Pricing Errors
New Price
Pricing Strategies
25. (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%
Retail Price Formula
Profit Margin
Pricing Strategies: Price Lining
Planned Initial Markup % Formula
26. 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.
Pricing Strategies: Price Ranges
Sell-Through Rate
Markup
Promotion Errors
27. Promotional markdown that involves selling at or near cost for promotional purposes
Pricing Errors
Loss-Leader
Ideal Markdown
Original Price
28. Having the right merchandise - at the right time - for the right price - in the right place
Adage of Profitability for Retailers
Sell-Through Rate
Pricing Strategies
Reasons for taking Markdowns
29. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Acid test or Quick Ratio
Cost of Goods Sold (COGS) Formula
Off-Price Markdown Percentage Formula
Cumulative Markup
30. 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
Cost of Goods Sold (COGS) Formula
Debt Equity Ratio Formula
Promotional Markdown
The Cost Method
31. Cost Price/ (100%-markup %)
Retail Price Formula
Return on Net Worth (RONW) Formula
Profit Margin
Financial Leverage Ratio
32. 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
LIFO (last in - first out)
Financial Leverage Ratio Formula
Selling Price Formula
Planned Initial Markup % Formula
33. The retailers financial condition at a specific point in time
Balance Sheet
Markdown Percentage
Planned Initial Markup % Formula
Cost Complement Formula
34. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Sell-Through Rate
Current Liabilities
Pricing Errors
Buying Errors
35. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Current Ratio (CR) Formula
Fixed Liabilities
Forced Obsolescence
Late Markdowns
36. Priced too high initially - priced too low - selling price of competitors
Early Markdowns
Loss-Leader
Pricing Errors
Pricing Strategies: Price Zones
37. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Return on Assets (ROA) Formul
Expense Ratio Formula
Off-Price Markdown Percentage Formula
Cost Complement Formula
38. Improper displays - merchandise returns due to high pressure selling
Debt Equity Ratio
Promotion Errors
Pricing Strategies
Retail Price Formula
39. Net Profit/ Net Sales
Turnover Rate Formula
Adage of Profitability for Retailers
Profit Margin Analysis Formula
The Cost Method
40. Dollar markup ($)/ retail price ($)
Pricing Errors
Pricing Strategies: Price Ranges
Markup % of Retail Formula
Retail Inventory Method
41. Ranges of prices that appeals for a particular group of consumers
Markdown Optimization
Liabilities
Dollar Markdown Formula
Pricing Strategies: Price Zones
42. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item
Forced Obsolescence
Pricing Strategies
Markdown
Fixed Liabilities
43. Costs involved in running the business
Cumulative Markup % Formula
Uncontrollable Errors
Operating Expenses
Net Sales
44. Merchandise will sell at highest price longer period of time - appear exclusive - sale of goods at regular price is not disrupted - greater amount of goods can be accumulated and then marked down.
Late Markdowns
GMROII (Gross Margin Return on Inventory Investment)
Profit and Loss Statement (P&L Statement)
Operating Expenses
45. Price reduction for merchandise that has not lived up to buyers' expectations. Includes broken assortments of merchandise - merchandise lines that buyers no longer want to carry - shopworn goods - items that haven't sold because of an event beyond bu
Profit Margin
Financial Leverage Ratio
Clearance Markdowns
Markdown Percentage
46. Financial debts incurred by a retailer
Promotion Errors
Liabilities
Accounts Receivable (AR)
Cumulative Markup % Formula
47. Liabilities+ Owner's equity or net worth
Loss-Leader
Cumulative Markup % Formula
Return on Net Worth (RONW) Formula
Assets Formula
48. Dollar markup ($)/ cost price ($)
Return on Assets (ROA) Formul
Markup % of Cost Formula
Cumulative Markup
Assets Formula
49. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Markdown Percentage
Reasons for taking Markdowns
Assets
Markup % of Retail Formula
50. Net Profit After Taxes/ Net Worth
Net Profit
Return on Net Worth (RONW) Formula
Current Liabilities
LIFO (last in - first out)