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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. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Debt Equity Ratio
Net Sales
Cost of Goods Sold (COGS) Formula
Operating Expenses
2. Net Profit After Taxes/ Net Worth
Markup
Markup % of Cost Formula
Return on Net Worth (RONW) Formula
Buying Errors
3. The cost of merchandise that was sold (including the method that was used to determine cost)
Cost of Goods Sold
Acid test or Quick Ratio
Pricing Strategies: Price Ranges
Fixed Assets
4. Sales for the period/ average inventory
Sell-Through Rate
FIFO (First in - First out)
Turnover Rate Formula
Return on Assets
5. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Profit and Loss Statement (P&L Statement)
Promotional Markdown
Off-Price Markdown Percentage Formula
Retail Price Formula
6. Financial debts incurred by a retailer
Dollar Markdown Formula
Liabilities
The Cost Method
Markdown optimization
7. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Initial Markup (IMU)
Planned Initial Markup % Formula
Cost of Goods Sold
Buying Errors
8. 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
Return on Sales
Profit and Loss Statement (P&L Statement)
GMROII (Gross Margin Return on Inventory Investment)
Promotion Errors
9. Total Expenses/ Net Sales
Loss-Leader
Expense Ratio Formula
Fixed Liabilities
LIFO (last in - first out)
10. 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.
Markdown Cancellation ($) Formula
Markdown Percentage
Inventory
Current Ratio
11. Sales less cost of goods sold
Markdown Percentage Formula
Cumulative Markup
Current Assets
Gross Margin
12. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Current Liabilities
Temporary Price Reduction
Markdown Optimization
Retail Inventory Method
13. (Cash + Accounts Receivable) / Current Liabilities
Pricing Strategies: Price Ranges
Acid Test or Quick Ratio (QR) Formula
Markdown
Promotional Markdown
14. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Expense Ratio
Financial Leverage Ratio
5 Steps of Retail Inventory Method
Off-Price Markdowns
15. The prices from lowest to highest that are carried within a merchandise category
Profit Margin
Pricing Strategies: Price Ranges
Off-Price Markdowns
Current Ratio
16. Amount of markdown usually less - take the loss early will be easier - strengthen goodwill - replenish stock in lower price lines - leads to higher stock turnover - higher likelihood merchandise will sell in a timely manner
Early Markdowns
Clearance Markdowns
LIFO (last in - first out)
Off-Price Markdown Percentage Formula
17. Can be transformed simply and rapidly into cash
Profit Margin
Current Assets
Markdown optimization
Acid test or Quick Ratio
18. The weather - merchandise is shopworn - economic downturn
Uncontrollable Errors
Selling Price Formula
Markdown Cancellation ($) Formula
Accounts Receivable (AR)
19. Priced too high initially - priced too low - selling price of competitors
Gross Margin
Pricing Errors
Pricing Strategies: Price Ranges
Current Liabilities
20. 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.
Fixed Liabilities
Markdown Percentage
Current Assets
Promotional Markdown
21. Having the right merchandise - at the right time - for the right price - in the right place
Cumulative Markup
Debt Equity Ratio
Adage of Profitability for Retailers
Pricing Strategies: Price Ranges
22. Net Profit After Taxes/ Total Assets
Acid Test or Quick Ratio (QR) Formula
Return on Assets (ROA) Formul
Early Markdowns
Balance Sheet
23. 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.
Price Sensitivity
Loss-Leader
Pricing Strategies: Price Zones
Late Markdowns
24. Short time - like 1 or 2 day sales
Temporary Price Reduction
Markdown Cancellation ($) Formula
Markup
GMROII (Gross Margin Return on Inventory Investment)
25. What the retailer owns in monetary value
Return on Net Worth (RONW) Formula
Original Price
Uncontrollable Errors
Assets
26. Price Lining - price zones - price ranges
Sell-Through Rate
Initial Markup (IMU)
Current Assets
Pricing Strategies
27. Original Retail price- markdown selling price
Dollar Markdown Formula
Current Liabilities
Financial Leverage Ratio Formula
Pricing Strategies
28. In the Cost Method. Merchandise most recently purchased is assumed to have been sold first. Therefore - the ending inventory reflects the items in stock for the longest period of time. Produces lowest ending inventory value and highest cost of goods
LIFO (last in - first out)
Retail Inventory Method
Inventory
Selling Price Formula
29. Improper displays - merchandise returns due to high pressure selling
Profit Margin
Markup % of Retail Formula
Forced Obsolescence
Promotion Errors
30. Cost Price/ (100%-markup %)
Cumulative Markup
Gross Margin
Debt Equity Ratio
Retail Price Formula
31. Dollar markup ($)/ cost price ($)
Assets Formula
Retail Inventory Method
Inventory
Markup % of Cost Formula
32. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.
Markdown Percentage
Profit
Profit Margin
Late Markdowns
33. Based on a calculation commonly represented as a percentage - comparing the amount of inventory a retailer receives from a manufacturer or supplier against what is actually sold to the consumer
Sell-Through Rate
Clearance Markdowns
Cumulative Markup % Formula
Price Sensitivity
34. To make a profit buyers must set an appropriate price considering many variables and using past experience and knowledge of future trends. A markup on an item does not typically remain constant.
Current Ratio (CR) Formula
Markup
Expense Ratio Formula
Debt Equity Ratio
35. Costs involved in running the business
Cash Flow Formula
Operating Expenses
Liabilities
Markup % of Cost Formula
36. The retailers financial condition at a specific point in time
Fixed Assets
Pricing Strategies: Price Ranges
Loss-Leader
Balance Sheet
37. Ranges of prices that appeals for a particular group of consumers
Fixed Liabilities
Profit and Loss Statement (P&L Statement)
Operating Expenses
Pricing Strategies: Price Zones
38. Cash Received by the retailer-cash leaving the retailer
Fixed Assets
Cash Flow Formula
Acid test or Quick Ratio
Assets Formula
39. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item
Promotion Errors
Pricing Strategies: Price Zones
Markdown
Return on Assets
40. Promotional markdown that involves selling at or near cost for promotional purposes
Cost of Goods Sold
Assets Formula
Markdown
Loss-Leader
41. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)
Markdown Percentage Formula
GMROII (Gross Margin Return on Inventory Investment)
Depreciation
Markdown Cancellation ($) Formula
42. (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%
Cumulative Markup
Return on Net Worth (RONW) Formula
Planned Initial Markup % Formula
Turnover Rate Formula
43. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit
Turnover Rate Formula
Pricing Strategies
Profit and Loss Statement (P&L Statement)
Cumulative Markup % Formula
44. Usually lower than original - but held for longer period
Markup % of Cost Formula
Selling Price Formula
Initial Markup (IMU)
Regular Price
45. 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
The Cost Method
Liabilities
Markdown Optimization
Operating Expenses
46. Total Markup on all goods on hand/ retail price of all goods on hand
LIFO (last in - first out)
Return on Net Worth (RONW) Formula
Acid test or Quick Ratio
Cumulative Markup % Formula
47. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Late Markdowns
Expense Ratio
Fixed Assets
Fixed Liabilities
48. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Cost of Goods Sold
Cost of Goods Sold (COGS) Formula
Accounts Receivable (AR)
Net Profit
49. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Markdown Percentage
Pricing Depends on 2 factors
Net Sales
Fixed Liabilities
50. Evaluates the managament of capital
The Cost Method
Pricing Strategies: Price Zones
Operating Expenses
Return on Sales
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