Salon Financial Management Flashcards
7 cards from real Beauty Business practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Salon Financial Management flashcards as text
What is the main benefit of tracking key performance indicators (KPIs) monthly?
Answer: It reveals trends so owners can act early
Monthly KPI tracking spots trends early so problems can be addressed quickly.
A salon's product inventory turns over 4 times per year. What does a low turnover rate typically indicate?
Answer: Too much cash is tied up in slow-moving stock
Low turnover means inventory is sitting unsold, tying up cash.
Which document summarizes a salon's assets, liabilities, and owner's equity at a point in time?
Answer: Balance sheet
The balance sheet shows assets, liabilities, and equity at a specific date.
If a salon raises service prices by 10% while keeping costs steady, what generally happens to profit margin?
Answer: It increases
Higher prices with unchanged costs widen the profit margin.
What is the purpose of setting aside a percentage of income for estimated taxes?
Answer: To avoid a large unexpected tax bill
Reserving for taxes prevents cash-flow shock when tax payments come due.
A retail product that isn't selling has been marked down repeatedly. What is this slow inventory called?
Answer: Dead stock
Dead stock is inventory that isn't selling and ties up money.
Why do many salons use a point-of-sale (POS) system for financial management?
Answer: To track sales, inventory, and reporting accurately
A POS system records transactions and generates accurate financial and inventory reports.