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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. Original Retail price- markdown selling price
Dollar Markdown Formula
Selling Price Formula
Markdown Percentage Formula
Assets
2. 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
Markdown
Cash Flow Formula
Current Liabilities
3. 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.
Markup % of Cost Formula
Return on Assets (ROA) Formul
Accounts Receivable (AR)
Markdown Cancellations
4. Revenues received by a retailer
Net Sales
Forced Obsolescence
Acid test or Quick Ratio
FIFO (First in - First out)
5. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Cumulative Markup
Balance Sheet
Off-Price Markdown Percentage Formula
Cost Complement Formula
6. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Forced Obsolescence
5 Steps of Retail Inventory Method
Original Price
Cost Complement Formula
7. Priced too high initially - priced too low - selling price of competitors
Current Ratio
Operating Expenses
Pricing Errors
The Cost Method
8. Current Liabilites/ Net Worth
Adage of Profitability for Retailers
Inventory
Debt Equity Ratio Formula
Financial Leverage Ratio Formula
9. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Profit
Pricing Strategies: Price Lining
Cost Complement Formula
Pricing Depends on 2 factors
10. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Markup
Acid test or Quick Ratio
Planned Initial Markup % Formula
Buying Errors
11. The energizing force that fuels and sustains our economic system
Selling Price Formula
Retail Price Formula
Profit
Assets
12. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
5 Steps of Retail Inventory Method
Planned Initial Markup % Formula
Markdown optimization
Markdown Percentage Formula
13. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Fixed Liabilities
FIFO (First in - First out)
Expense Ratio
Pricing Strategies: Price Lining
14. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
Markdown
The Cost Method
Financial Leverage Ratio
Current Liabilities
15. 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
Expense Ratio Formula
Fixed Assets
Cost of Goods Sold (COGS) Formula
16. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Cost of Goods Sold (COGS) Formula
Markdown Percentage
Loss-Leader
Debt Equity Ratio Formula
17. Cost + Markup
Selling Price Formula
Off-Price Markdowns
Uncontrollable Errors
Markdown Percentage
18. Net Profit/ Net Sales
Profit Margin Analysis Formula
Markup % of Retail Formula
Forced Obsolescence
Return on Sales
19. Price is changed (up or down)
Ideal Markdown
New Price
Markdown Cancellations
Cumulative Markup % Formula
20. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Return on Net Worth
Net Profit
Acid Test or Quick Ratio (QR) Formula
Pricing Errors
21. Having the right merchandise - at the right time - for the right price - in the right place
Current Ratio
Debt Equity Ratio Formula
Return on Net Worth (RONW) Formula
Adage of Profitability for Retailers
22. 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
New Price
Fixed Assets
Depreciation
23. First price or Manufacturers suggestet Retal Price (MSRP)
Fixed Liabilities
Original Price
Financial Leverage Ratio Formula
Profit Margin
24. Total Expenses/ Net Sales
Markdown Cancellation ($) Formula
Acid test or Quick Ratio
Expense Ratio Formula
Profit
25. Price Lining - price zones - price ranges
Fixed Assets
Pricing Strategies
Regular Price
Markdown Percentage
26. Improper displays - merchandise returns due to high pressure selling
Profit
Promotion Errors
Fixed Liabilities
Financial Leverage Ratio Formula
27. Financial debts incurred by a retailer
Markdown
Liabilities
Uncontrollable Errors
Financial Leverage Ratio Formula
28. Can be transformed simply and rapidly into cash
Fixed Assets
Expense Ratio
Liabilities
Current Assets
29. AKA Return on Sales - Profit analysis; Indicates the extend to which retailers have the ability to cover their expenses and earn a profit - as well as a buyers ability to purchase the correct assortment of merchandise
Current Assets
Selling Price Formula
Profit Margin
Acid Test or Quick Ratio (QR) Formula
30. Amount of markdown usually less - take the loss early will be easier - strengthen goodwill - replenish stock in lower price lines - leads to higher stock turnover - higher likelihood merchandise will sell in a timely manner
Pricing Depends on 2 factors
Current Ratio
Early Markdowns
Markdown
31. Buying errors - promotion errors - pricing errors - uncontrollable errors
Balance Sheet
Reasons for taking Markdowns
Inventory
Uncontrollable Errors
32. Cash Received by the retailer-cash leaving the retailer
Cash Flow Formula
Selling Price Formula
Early Markdowns
Loss-Leader
33. The number of items remaining in stock x dollar markdown
Operating Expenses
Markdown Cancellation ($) Formula
Return on Net Worth
Pricing Depends on 2 factors
34. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Pricing Strategies
Return on Net Worth
Cost of Goods Sold (COGS) Formula
Cost Complement Formula
35. Total Markup on all goods on hand/ retail price of all goods on hand
Acid Test or Quick Ratio (QR) Formula
Cash Flow Formula
Cumulative Markup % Formula
Cost of Goods Sold
36. 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 Zones
Markup
LIFO (last in - first out)
Inventory
37. (Cash + Accounts Receivable) / Current Liabilities
Acid Test or Quick Ratio (QR) Formula
Current Ratio
Operating Expenses
Late Markdowns
38. Cost Price/ (100%-markup %)
The Cost Method
Pricing Strategies: Price Zones
Retail Price Formula
Late Markdowns
39. The weather - merchandise is shopworn - economic downturn
Cost of Goods Sold (COGS) Formula
FIFO (First in - First out)
Uncontrollable Errors
Pricing Depends on 2 factors
40. The cost of merchandise that was sold (including the method that was used to determine cost)
Cost of Goods Sold
Markdown Cancellation ($) Formula
Markup
Markdown Cancellations
41. Examines the financial health of a retailer - as one of the best indicators of having too much debt in relationship to net worth. Comparres the money that vendors or banks are risking with the money that the retail owners have invested in their opera
Pricing Strategies: Price Ranges
Fixed Assets
Debt Equity Ratio
Ideal Markdown
42. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Return on Assets
Retail Inventory Method
Loss-Leader
Acid Test or Quick Ratio (QR) Formula
43. Net dollar markdown/ net dollar selling price
Acid test or Quick Ratio
Markdown Percentage Formula
Turnover Rate Formula
New Price
44. Temporary price reduction for a specific period of time for the express purpose of generating store traffic and sales. Prices return to original retail price at end of sale period.
Promotional Markdown
Pricing Strategies: Price Lining
Liabilities
Retail Price Formula
45. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Acid Test or Quick Ratio (QR) Formula
Planned Initial Markup % Formula
Accounts Receivable (AR)
Markdown Percentage
46. In Cost Method. Merchandise sold during a time period is assumed to be sold in the order the merchandise was received. Merchandise on hand for the longest period of time is sold first. Therefore - the ending inventory reflects the items in stock for
GMROII (Gross Margin Return on Inventory Investment)
FIFO (First in - First out)
Financial Leverage Ratio Formula
Regular Price
47. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Net Profit
Ideal Markdown
Markdown Cancellation ($) Formula
Pricing Strategies: Price Zones
48. 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
GMROII (Gross Margin Return on Inventory Investment)
Sell-Through Rate
Net Sales
Accounts Receivable (AR)
49. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Late Markdowns
Financial Leverage Ratio Formula
Acid Test or Quick Ratio (QR) Formula
Fixed Assets
50. One that is just enough to move the goods
Debt Equity Ratio Formula
Assets Formula
Retail Inventory Method
Ideal Markdown