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. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Gross Margin
Cost Complement Formula
Return on Net Worth
Late Markdowns
2. What the retailer owns in monetary value
Assets
5 Steps of Retail Inventory Method
Gross Margin
Uncontrollable Errors
3. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Off-Price Markdowns
Return on Assets
Return on Assets (ROA) Formul
Fixed Assets
4. The higher the ratio the quicker current liabilities can be paid. This ratio also indicates the margin of safety a retailer has on hand to cover possible shrinkages
Cumulative Markup
Planned Initial Markup % Formula
Current Ratio
Off-Price Markdowns
5. The prices from lowest to highest that are carried within a merchandise category
Pricing Strategies: Price Ranges
Markdown Percentage
Pricing Strategies
FIFO (First in - First out)
6. 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
Original Price
Current Ratio
Off-Price Markdowns
7. Liabilities+ Owner's equity or net worth
LIFO (last in - first out)
Assets Formula
Cost of Goods Sold
New Price
8. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Depreciation
Net Profit
Financial Leverage Ratio
Cumulative Markup % Formula
9. Total Expenses/ Net Sales
Expense Ratio Formula
Expense Ratio
Gross Margin Return on Inventory Investment-GMROI Formula
Markdown Cancellations
10. 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 Ratio
Profit Margin
Planned Initial Markup % Formula
Depreciation
11. One that is just enough to move the goods
Clearance Markdowns
Operating Expenses
Regular Price
Ideal Markdown
12. 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
Uncontrollable Errors
5 Steps of Retail Inventory Method
Fixed Liabilities
Return on Net Worth
13. 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 Errors
Markup
Reasons for taking Markdowns
Pricing Depends on 2 factors
14. Net Profit/ Net Sales
Profit Margin Analysis Formula
Expense Ratio Formula
Assets
Sell-Through Rate
15. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
New Price
Fixed Liabilities
Retail Price Formula
Return on Assets (ROA) Formul
16. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Clearance Markdowns
Pricing Strategies: Price Lining
Markdown optimization
Early Markdowns
17. (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%
Off-Price Markdown Percentage Formula
Cumulative Markup
The Cost Method
Planned Initial Markup % Formula
18. Dollar markup ($)/ cost price ($)
Clearance Markdowns
Depreciation
Current Assets
Markup % of Cost Formula
19. (gross margin % x Turnover) / (100%-markup %)
Markdown Percentage Formula
Gross Margin Return on Inventory Investment-GMROI Formula
Temporary Price Reduction
Price Sensitivity
20. Cash Received by the retailer-cash leaving the retailer
The Cost Method
Cash Flow Formula
Return on Assets (ROA) Formul
Pricing Strategies: Price Lining
21. 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.
Adage of Profitability for Retailers
Expense Ratio
Profit Margin Analysis Formula
Markdown optimization
22. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.
Initial Markup (IMU)
Promotion Errors
Ideal Markdown
Pricing Strategies: Price Zones
23. Sales for the period/ average inventory
Turnover Rate Formula
Regular Price
Buying Errors
Dollar Markdown Formula
24. 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)
Sell-Through Rate
Return on Net Worth (RONW) Formula
Cost Complement Formula
25. 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)
Financial Leverage Ratio
Financial Leverage Ratio Formula
26. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.
Cost of Goods Sold
Markdown optimization
Expense Ratio Formula
Return on Net Worth
27. Can be transformed simply and rapidly into cash
Current Assets
Retail Price Formula
Markdown Optimization
Assets Formula
28. Cost + Markup
Selling Price Formula
Current Ratio (CR) Formula
Fixed Liabilities
Markdown Cancellations
29. 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
Pricing Strategies: Price Lining
Cost of Goods Sold
Debt Equity Ratio Formula
The Cost Method
30. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)
Expense Ratio
Pricing Depends on 2 factors
Sell-Through Rate
Current Liabilities
31. Total Markup on all goods on hand/ retail price of all goods on hand
Accounts Receivable (AR)
Cumulative Markup % Formula
Temporary Price Reduction
LIFO (last in - first out)
32. Improper displays - merchandise returns due to high pressure selling
Cost of Goods Sold (COGS) Formula
Expense Ratio
Net Sales
Promotion Errors
33. 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.
Accounts Receivable (AR)
Cumulative Markup % Formula
Pricing Depends on 2 factors
Debt Equity Ratio
34. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Net Profit
Retail Inventory Method
Cost Complement Formula
Operating Expenses
35. Buying errors - promotion errors - pricing errors - uncontrollable errors
Gross Margin Return on Inventory Investment-GMROI Formula
Reasons for taking Markdowns
Net Sales
Early Markdowns
36. 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
Clearance Markdowns
Early Markdowns
GMROII (Gross Margin Return on Inventory Investment)
37. 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
Markup % of Retail Formula
Loss-Leader
Clearance Markdowns
Planned Initial Markup % Formula
38. Financial debts incurred by a retailer
Markup % of Cost Formula
Return on Sales
Current Ratio
Liabilities
39. 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
Cost Complement Formula
Markdown Optimization
Inventory
Sell-Through Rate
40. Price is changed (up or down)
Acid test or Quick Ratio
New Price
Markdown optimization
Financial Leverage Ratio
41. Short time - like 1 or 2 day sales
Forced Obsolescence
Return on Sales
Temporary Price Reduction
Return on Net Worth (RONW) Formula
42. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
Fixed Liabilities
Markdown
Financial Leverage Ratio
Price Sensitivity
43. 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
Net Sales
Regular Price
GMROII (Gross Margin Return on Inventory Investment)
Pricing Strategies
44. Current Liabilites/ Net Worth
Pricing Errors
Debt Equity Ratio
Markup % of Cost Formula
Debt Equity Ratio Formula
45. Ranges of prices that appeals for a particular group of consumers
Buying Errors
Pricing Strategies: Price Zones
Cost of Goods Sold (COGS) Formula
Return on Net Worth
46. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Gross Margin Return on Inventory Investment-GMROI Formula
Current Ratio (CR) Formula
Clearance Markdowns
Pricing Strategies: Price Lining
47. The cost of merchandise that was sold (including the method that was used to determine cost)
Pricing Errors
Markdown Cancellation ($) Formula
Financial Leverage Ratio Formula
Cost of Goods Sold
48. Having the right merchandise - at the right time - for the right price - in the right place
Depreciation
Early Markdowns
Adage of Profitability for Retailers
Profit
49. (Cash + Accounts Receivable) / Current Liabilities
Acid Test or Quick Ratio (QR) Formula
Depreciation
Pricing Strategies: Price Zones
Turnover Rate Formula
50. Cost Price/ (100%-markup %)
Acid Test or Quick Ratio (QR) Formula
Retail Price Formula
Cumulative Markup % Formula
Temporary Price Reduction