Beauty Business Financial Management and Pricing Questions and Answers Flashcards
6 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 6 Beauty Business Financial Management and Pricing Questions and Answers flashcards as text
What is the term for the total revenue remaining after subtracting the cost of goods sold in a beauty salon?
Answer: Gross profit
Gross profit is calculated by subtracting cost of goods sold from total revenue.
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?
Answer: Cost-plus pricing
Cost-plus pricing adds a markup percentage to the total cost of delivering a service.
Which financial document provides a snapshot of a beauty business's assets, liabilities, and equity at a specific point in time?
Answer: Balance sheet
A balance sheet lists assets, liabilities, and owner's equity as of a specific date.
When a beauty business offers a lower introductory price for a new treatment to attract clients quickly, this is known as what pricing strategy?
Answer: Penetration pricing
Penetration pricing uses low initial prices to rapidly build a client base for a new service.
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?
Answer: Inventory turnover ratio
Inventory turnover ratio shows how many times inventory is sold and restocked during a given period.
Which type of expense in a beauty salon remains the same regardless of the number of clients served, such as monthly rent?
Answer: Fixed expense
Fixed expenses like rent stay constant regardless of business volume.