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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. Can be transformed simply and rapidly into cash
5 Steps of Retail Inventory Method
Current Assets
Return on Net Worth
Assets
2. Net dollar markdown/ net dollar selling price
Cumulative Markup
Retail Inventory Method
Markdown Percentage Formula
Balance Sheet
3. Original Retail price- markdown selling price
Cumulative Markup % Formula
Dollar Markdown Formula
Return on Assets (ROA) Formul
Initial Markup (IMU)
4. Ranges of prices that appeals for a particular group of consumers
Current Liabilities
Pricing Strategies: Price Zones
Regular Price
Markdown Percentage
5. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down
Off-Price Markdown Percentage Formula
5 Steps of Retail Inventory Method
Current Ratio
Balance Sheet
6. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes
Markup
Net Profit
Acid test or Quick Ratio
Balance Sheet
7. The number of items remaining in stock x dollar markdown
Markdown
Selling Price Formula
Markdown Cancellation ($) Formula
The Cost Method
8. Net Profit After Taxes/ Net Worth
Current Ratio (CR) Formula
5 Steps of Retail Inventory Method
Return on Net Worth (RONW) Formula
Markup
9. First price or Manufacturers suggestet Retal Price (MSRP)
Pricing Strategies: Price Lining
Original Price
Markdown Percentage
Financial Leverage Ratio
10. Price is changed (up or down)
Loss-Leader
Buying Errors
New Price
Uncontrollable Errors
11. In the Cost Method. Merchandise most recently purchased is assumed to have been sold first. Therefore - the ending inventory reflects the items in stock for the longest period of time. Produces lowest ending inventory value and highest cost of goods
LIFO (last in - first out)
Pricing Strategies: Price Lining
Promotional Markdown
Profit Margin
12. Current Liabilites/ Net Worth
Pricing Strategies: Price Lining
The Cost Method
Clearance Markdowns
Debt Equity Ratio Formula
13. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit
Financial Leverage Ratio
LIFO (last in - first out)
Regular Price
Profit and Loss Statement (P&L Statement)
14. Wrong Merchandise - odd assortment colors/sizes - seasonal goods
Markup
Cost of Goods Sold (COGS) Formula
Original Price
Buying Errors
15. Dollar markup ($)/ retail price ($)
Markdown Cancellations
Cumulative Markup % Formula
Forced Obsolescence
Markup % of Retail Formula
16. 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)
Cash Flow Formula
Fixed Liabilities
Expense Ratio
17. Short time - like 1 or 2 day sales
Temporary Price Reduction
Gross Margin Return on Inventory Investment-GMROI Formula
Promotional Markdown
Markdown Percentage
18. Evaluates the managament of capital
Planned Initial Markup % Formula
Current Liabilities
Return on Sales
Net Profit
19. 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
Uncontrollable Errors
Promotion Errors
Retail Price Formula
20. 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.
Forced Obsolescence
Markup
Financial Leverage Ratio
Pricing Strategies: Price Ranges
21. The energizing force that fuels and sustains our economic system
Profit
Markdown optimization
Return on Sales
Expense Ratio Formula
22. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.
Promotion Errors
Return on Assets (ROA) Formul
Financial Leverage Ratio Formula
Cumulative Markup
23. The prices from lowest to highest that are carried within a merchandise category
Markdown optimization
Sell-Through Rate
Pricing Strategies: Price Ranges
Inventory
24. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)
Fixed Liabilities
Retail Inventory Method
Assets
Expense Ratio
25. Current Assets/ Current Liabilities
Current Ratio (CR) Formula
Acid test or Quick Ratio
Current Assets
Pricing Errors
26. Total Assets/ Net Worth
Regular Price
Financial Leverage Ratio Formula
Expense Ratio Formula
Fixed Liabilities
27. Having the right merchandise - at the right time - for the right price - in the right place
Pricing Strategies
Sell-Through Rate
Return on Net Worth (RONW) Formula
Adage of Profitability for Retailers
28. Net Profit/ Net Sales
Balance Sheet
Buying Errors
Operating Expenses
Profit Margin Analysis Formula
29. Sales less cost of goods sold
Dollar Markdown Formula
Gross Margin
Profit Margin Analysis Formula
Sell-Through Rate
30. 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
Uncontrollable Errors
Pricing Strategies: Price Lining
Sell-Through Rate
Current Assets
31. (gross margin % x Turnover) / (100%-markup %)
Off-Price Markdown Percentage Formula
Gross Margin Return on Inventory Investment-GMROI Formula
Return on Assets (ROA) Formul
Return on Sales
32. (Cash + Accounts Receivable) / Current Liabilities
Markdown Cancellation ($) Formula
Assets
Acid Test or Quick Ratio (QR) Formula
Cost of Goods Sold (COGS) Formula
33. Merchandise Available for sale at cost/ Merchandise available for sale at retail
Markdown optimization
Return on Net Worth (RONW) Formula
Promotion Errors
Cost Complement Formula
34. 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
Acid Test or Quick Ratio (QR) Formula
The Cost Method
Accounts Receivable (AR)
New Price
35. Liabilities+ Owner's equity or net worth
Profit Margin Analysis Formula
Return on Net Worth (RONW) Formula
Assets Formula
Adage of Profitability for Retailers
36. Revenues received by a retailer
Expense Ratio Formula
Markup
Gross Margin Return on Inventory Investment-GMROI Formula
Net Sales
37. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)
Depreciation
Financial Leverage Ratio Formula
Selling Price Formula
Planned Initial Markup % Formula
38. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)
Current Liabilities
Operating Expenses
Reasons for taking Markdowns
Fixed Assets
39. The weather - merchandise is shopworn - economic downturn
Uncontrollable Errors
Initial Markup (IMU)
Late Markdowns
Promotion Errors
40. 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
Reasons for taking Markdowns
5 Steps of Retail Inventory Method
Cost of Goods Sold (COGS) Formula
Return on Net Worth
41. Cost + Markup
Fixed Assets
5 Steps of Retail Inventory Method
Markdown Cancellations
Selling Price Formula
42. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down
Current Ratio (CR) Formula
Debt Equity Ratio
Promotional Markdown
Markdown Cancellations
43. Price Lining - price zones - price ranges
Pricing Strategies
Promotional Markdown
Price Sensitivity
Depreciation
44. Sales for the period/ average inventory
Turnover Rate Formula
Fixed Assets
Initial Markup (IMU)
Current Assets
45. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory
Regular Price
Cost of Goods Sold (COGS) Formula
Financial Leverage Ratio Formula
Debt Equity Ratio
46. One that is just enough to move the goods
Profit and Loss Statement (P&L Statement)
Ideal Markdown
Profit Margin Analysis Formula
Price Sensitivity
47. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.
Markdown optimization
Retail Inventory Method
Accounts Receivable (AR)
Markup
48. 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
Operating Expenses
Profit Margin
Regular Price
Profit Margin Analysis Formula
49. Net Profit After Taxes/ Total Assets
Adage of Profitability for Retailers
New Price
Reasons for taking Markdowns
Return on Assets (ROA) Formul
50. Ensures that there is enough cash to pay debts. Any time the ratio is colse to 1 - the retailer is said to be in a liquid position.
Acid test or Quick Ratio
Debt Equity Ratio
Pricing Depends on 2 factors
Operating Expenses