Beauty Business Beauty Business Financial Management and Pricing Questions and Answers 2

Question 1

What is the term for the total revenue remaining after subtracting the cost of goods sold in a beauty salon?

Accepted Answer

Gross profit

Answer

Net income

Answer

Operating expense

Answer

Retained earnings

Question 2

A salon owner wants to ensure each service covers its costs and contributes to overhead — which pricing method sets prices based on total cost plus a desired profit margin?

Accepted Answer

Cost-plus pricing

Answer

Competitive pricing

Answer

Value-based pricing

Answer

Penetration pricing

Question 3

Which financial document provides a snapshot of a beauty business's assets, liabilities, and equity at a specific point in time?

Accepted Answer

Balance sheet

Answer

Income statement

Answer

Cash flow statement

Answer

Budget forecast

Question 4

When a beauty business offers a lower introductory price for a new treatment to attract clients quickly, this is known as what pricing strategy?

Accepted Answer

Penetration pricing

Answer

Skimming pricing

Answer

Bundle pricing

Answer

Premium pricing

Question 5

What key financial metric measures how efficiently a salon uses its inventory by calculating how many times stock is sold and replaced over a period?

Accepted Answer

Inventory turnover ratio

Answer

Current ratio

Answer

Debt-to-equity ratio

Answer

Return on investment

Question 6

Which type of expense in a beauty salon remains the same regardless of the number of clients served, such as monthly rent?

Accepted Answer

Fixed expense

Answer

Variable expense

Answer

Semi-variable expense

Answer

Direct expense