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Test your basic knowledge |
Retail Financials
Start Test
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. Current Assets/ Current Liabilities
New Price
Net Sales
Current Ratio (CR) Formula
Fixed Assets
2. Promotional markdown that involves selling at or near cost for promotional purposes
Dollar Markdown Formula
Return on Sales
LIFO (last in - first out)
Loss-Leader
3. 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
The Cost Method
Pricing Strategies: Price Ranges
Sell-Through Rate
Cumulative Markup % Formula
4. Revenues received by a retailer
Net Sales
Return on Sales
Loss-Leader
Balance Sheet
5. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)
Net Sales
Financial Leverage Ratio
Debt Equity Ratio
Return on Net Worth
6. 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
Loss-Leader
Price Sensitivity
5 Steps of Retail Inventory Method
Pricing Strategies: Price Zones
7. Evaluates the managament of capital
Markup % of Retail Formula
Return on Sales
Gross Margin
Retail Price Formula
8. Improper displays - merchandise returns due to high pressure selling
Markdown optimization
Assets
Promotion Errors
Pricing Errors
9. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.
Pricing Depends on 2 factors
Gross Margin
Adage of Profitability for Retailers
Initial Markup (IMU)
10. Net Profit After Taxes/ Total Assets
Return on Assets (ROA) Formul
Expense Ratio
Cumulative Markup % Formula
Profit Margin Analysis Formula
11. Cost + Markup
Financial Leverage Ratio
Selling Price Formula
Profit Margin
Sell-Through Rate
12. 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
Gross Margin
Promotional Markdown
The Cost Method
Reasons for taking Markdowns
13. 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
Gross Margin
Assets
Expense Ratio Formula
FIFO (First in - First out)
14. Total Expenses/ Net Sales
Expense Ratio Formula
Cash Flow Formula
Selling Price Formula
Adage of Profitability for Retailers
15. What the retailer owns in monetary value
Reasons for taking Markdowns
Assets
Cost of Goods Sold (COGS) Formula
Regular Price
16. Can be transformed simply and rapidly into cash
Pricing Strategies
Initial Markup (IMU)
Current Assets
Uncontrollable Errors
17. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented.
Forced Obsolescence
Cumulative Markup % Formula
Markdown Optimization
Return on Assets
18. Net Profit After Taxes/ Net Worth
Markdown Cancellation ($) Formula
Return on Net Worth (RONW) Formula
Markdown
Markdown Optimization
19. Dollar markup ($)/ retail price ($)
Markup % of Retail Formula
Fixed Assets
Original Price
Operating Expenses
20. The energizing force that fuels and sustains our economic system
Cost of Goods Sold
Return on Assets
Cost Complement Formula
Profit
21. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Cumulative Markup
Markdown optimization
Clearance Markdowns
Gross Margin Return on Inventory Investment-GMROI Formula
22. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Financial Leverage Ratio
Expense Ratio Formula
Retail Inventory Method
Return on Assets
23. Ranges of prices that appeals for a particular group of consumers
Pricing Strategies: Price Zones
Financial Leverage Ratio Formula
Selling Price Formula
Depreciation
24. Having the right merchandise - at the right time - for the right price - in the right place
Adage of Profitability for Retailers
Temporary Price Reduction
Retail Price Formula
Original Price
25. Total Assets/ Net Worth
Forced Obsolescence
GMROII (Gross Margin Return on Inventory Investment)
Financial Leverage Ratio Formula
Expense Ratio Formula
26. Cost Price/ (100%-markup %)
Current Ratio (CR) Formula
Retail Price Formula
5 Steps of Retail Inventory Method
Promotion Errors
27. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Late Markdowns
Clearance Markdowns
Liabilities
Cost of Goods Sold (COGS) Formula
28. Usually lower than original - but held for longer period
Inventory
Markdown optimization
Regular Price
Cost of Goods Sold
29. 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.
Markup % of Cost Formula
Markup % of Retail Formula
Return on Assets
Promotional Markdown
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
Early Markdowns
Expense Ratio
Markup
Fixed Liabilities
31. Financial debts incurred by a retailer
Sell-Through Rate
Cost Complement Formula
Original Price
Liabilities
32. The cost of merchandise that was sold (including the method that was used to determine cost)
Profit
Retail Price Formula
Cost of Goods Sold
Return on Assets
33. 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
Profit
Promotional Markdown
Gross Margin
LIFO (last in - first out)
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.
Markup
Return on Net Worth (RONW) Formula
Uncontrollable Errors
Markdown optimization
35. 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
Fixed Assets
Return on Assets
Markdown Cancellation ($) Formula
36. Total Markup on all goods on hand/ retail price of all goods on hand
Acid Test or Quick Ratio (QR) Formula
Cumulative Markup % Formula
Fixed Liabilities
Return on Sales
37. Priced too high initially - priced too low - selling price of competitors
Pricing Errors
Markdown Percentage
Profit Margin Analysis Formula
Selling Price Formula
38. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise
Net Sales
Promotion Errors
Profit and Loss Statement (P&L Statement)
Pricing Strategies: Price Lining
39. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)
Fixed Assets
Temporary Price Reduction
Return on Assets
Markdown Cancellations
40. Price is changed (up or down)
Inventory
New Price
Dollar Markdown Formula
Return on Net Worth
41. 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 Retail Formula
Accounts Receivable (AR)
Fixed Liabilities
Markup
42. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model
Markdown Optimization
Fixed Assets
Operating Expenses
Forced Obsolescence
43. 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.
Pricing Errors
Late Markdowns
Temporary Price Reduction
Cash Flow Formula
44. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.
Return on Assets (ROA) Formul
Pricing Strategies
Off-Price Markdowns
Clearance Markdowns
45. Sales for the period/ average inventory
Expense Ratio
Markup % of Retail Formula
Cost of Goods Sold
Turnover Rate Formula
46. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented
Fixed Assets
Accounts Receivable (AR)
Markdown optimization
Gross Margin Return on Inventory Investment-GMROI Formula
47. (Cash + Accounts Receivable) / Current Liabilities
Profit and Loss Statement (P&L Statement)
Fixed Liabilities
Acid Test or Quick Ratio (QR) Formula
Current Assets
48. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Fixed Assets
GMROII (Gross Margin Return on Inventory Investment)
Pricing Strategies: Price Ranges
Fixed Liabilities
49. Sales less cost of goods sold
FIFO (First in - First out)
Planned Initial Markup % Formula
Expense Ratio Formula
Gross Margin
50. (gross margin % x Turnover) / (100%-markup %)
Gross Margin Return on Inventory Investment-GMROI Formula
Selling Price Formula
Adage of Profitability for Retailers
Balance Sheet
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