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Test your basic knowledge |
Retail Financials
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Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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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. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Liabilities
Cumulative Markup
Markdown Cancellations
Markdown Percentage
2. 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
Financial Leverage Ratio
LIFO (last in - first out)
Cash Flow Formula
Sell-Through Rate
3. Net Profit/ Net Sales
Profit Margin Analysis Formula
Depreciation
Pricing Strategies
Off-Price Markdown Percentage Formula
4. What the retailer owns in monetary value
Clearance Markdowns
Assets
Return on Assets (ROA) Formul
Loss-Leader
5. Price is changed (up or down)
Pricing Strategies: Price Ranges
New Price
Profit and Loss Statement (P&L Statement)
Turnover Rate Formula
6. The cost of merchandise that was sold (including the method that was used to determine cost)
Expense Ratio Formula
Assets
Markdown Cancellations
Cost of Goods Sold
7. Total Expenses/ Net Sales
Cash Flow Formula
Cumulative Markup % Formula
Liabilities
Expense Ratio Formula
8. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Markdown Cancellation ($) Formula
Initial Markup (IMU)
Markdown Optimization
Fixed Liabilities
9. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit
Current Assets
Forced Obsolescence
Profit and Loss Statement (P&L Statement)
Financial Leverage Ratio
10. Net Profit After Taxes/ Total Assets
Return on Assets (ROA) Formul
Return on Assets
Operating Expenses
Assets Formula
11. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Net Profit
Return on Net Worth
Pricing Depends on 2 factors
Current Assets
12. Dollar markup ($)/ retail price ($)
Markup % of Cost Formula
Late Markdowns
Early Markdowns
Markup % of Retail Formula
13. In the Cost Method. Merchandise most recently purchased is assumed to have been sold first. Therefore - the ending inventory reflects the items in stock for the longest period of time. Produces lowest ending inventory value and highest cost of goods
LIFO (last in - first out)
Fixed Assets
Return on Net Worth (RONW) Formula
Gross Margin Return on Inventory Investment-GMROI Formula
14. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented.
Pricing Strategies: Price Lining
Financial Leverage Ratio Formula
Markdown Cancellation ($) Formula
Markdown Optimization
15. The prices from lowest to highest that are carried within a merchandise category
Fixed Liabilities
Pricing Strategies: Price Ranges
Promotional Markdown
Financial Leverage Ratio Formula
16. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Return on Net Worth
Current Liabilities
Current Assets
Promotional Markdown
17. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item
Accounts Receivable (AR)
Original Price
Pricing Strategies: Price Lining
Markdown
18. 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
Original Price
Markdown Cancellations
Price Sensitivity
Cost of Goods Sold
19. Cost Price/ (100%-markup %)
Late Markdowns
Financial Leverage Ratio Formula
Pricing Strategies: Price Lining
Retail Price Formula
20. Net dollar markdown/ net dollar selling price
Markdown Percentage Formula
Pricing Strategies
Turnover Rate Formula
Cash Flow Formula
21. Financial debts incurred by a retailer
Assets Formula
Liabilities
Price Sensitivity
Cumulative Markup
22. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
5 Steps of Retail Inventory Method
Retail Inventory Method
Forced Obsolescence
Pricing Strategies: Price Ranges
23. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Markup % of Retail Formula
Off-Price Markdowns
Pricing Strategies
Cumulative Markup
24. Usually lower than original - but held for longer period
Reasons for taking Markdowns
Regular Price
Current Ratio (CR) Formula
Markdown Percentage Formula
25. Costs involved in running the business
Planned Initial Markup % Formula
Regular Price
Operating Expenses
Off-Price Markdown Percentage Formula
26. Price Lining - price zones - price ranges
Pricing Strategies
Operating Expenses
Cost of Goods Sold
Gross Margin
27. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Fixed Assets
Assets
Pricing Depends on 2 factors
Buying Errors
28. Basic premise is to increase profits through more sales without an increase in inventory. Inventory is expressed in cost terms rather than cost percent - because it is related to investment dollars in gross margin - it should be expressed in cost num
Gross Margin
FIFO (First in - First out)
Accounts Receivable (AR)
GMROII (Gross Margin Return on Inventory Investment)
29. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Loss-Leader
Return on Assets
Return on Net Worth
Return on Assets (ROA) Formul
30. The energizing force that fuels and sustains our economic system
Late Markdowns
Current Liabilities
Acid Test or Quick Ratio (QR) Formula
Profit
31. Sales less cost of goods sold
Profit and Loss Statement (P&L Statement)
Markdown Percentage
GMROII (Gross Margin Return on Inventory Investment)
Gross Margin
32. Dollar markup ($)/ cost price ($)
Liabilities
Markup % of Cost Formula
Cost of Goods Sold (COGS) Formula
Retail Price Formula
33. Promotional markdown that involves selling at or near cost for promotional purposes
Cumulative Markup % Formula
Adage of Profitability for Retailers
Loss-Leader
Gross Margin Return on Inventory Investment-GMROI Formula
34. First price or Manufacturers suggestet Retal Price (MSRP)
Original Price
Inventory
Financial Leverage Ratio
Promotion Errors
35. Original Retail price- markdown selling price
Dollar Markdown Formula
Gross Margin
Retail Inventory Method
Fixed Assets
36. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Pricing Errors
Retail Inventory Method
Markdown Percentage Formula
Operating Expenses
37. Net Profit After Taxes/ Net Worth
Return on Net Worth (RONW) Formula
Pricing Strategies: Price Ranges
Markup % of Retail Formula
Depreciation
38. Total Assets/ Net Worth
Financial Leverage Ratio Formula
Forced Obsolescence
Net Profit
Cumulative Markup
39. Liabilities+ Owner's equity or net worth
Inventory
Cost of Goods Sold (COGS) Formula
Original Price
Assets Formula
40. 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
Expense Ratio
FIFO (First in - First out)
Pricing Strategies
Markdown Percentage Formula
41. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Reasons for taking Markdowns
Pricing Strategies: Price Lining
Markdown Percentage Formula
Debt Equity Ratio Formula
42. 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.
Return on Assets
Promotional Markdown
5 Steps of Retail Inventory Method
Balance Sheet
43. Having the right merchandise - at the right time - for the right price - in the right place
Markup % of Retail Formula
Pricing Strategies: Price Zones
Dollar Markdown Formula
Adage of Profitability for Retailers
44. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Markdown Percentage
Fixed Assets
Temporary Price Reduction
Current Assets
45. 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
Markdown Cancellation ($) Formula
Expense Ratio
Clearance Markdowns
5 Steps of Retail Inventory Method
46. Buying errors - promotion errors - pricing errors - uncontrollable errors
New Price
Fixed Assets
Reasons for taking Markdowns
Profit
47. Ranges of prices that appeals for a particular group of consumers
Markdown Cancellation ($) Formula
Pricing Strategies: Price Zones
Forced Obsolescence
Return on Assets (ROA) Formul
48. The retailers financial condition at a specific point in time
Acid Test or Quick Ratio (QR) Formula
Balance Sheet
Markup % of Cost Formula
Profit
49. One that is just enough to move the goods
Profit and Loss Statement (P&L Statement)
Cost of Goods Sold (COGS) Formula
Forced Obsolescence
Ideal Markdown
50. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Markup % of Retail Formula
Debt Equity Ratio Formula
Debt Equity Ratio
Fixed Assets
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