Test your basic knowledge |

Retail Financials

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. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit






2. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down






3. 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






4. Basic premise is to increase profits through more sales without an increase in inventory. Inventory is expressed in cost terms rather than cost percent - because it is related to investment dollars in gross margin - it should be expressed in cost num






5. Price reduction for merchandise that has not lived up to buyers' expectations. Includes broken assortments of merchandise - merchandise lines that buyers no longer want to carry - shopworn goods - items that haven't sold because of an event beyond bu






6. The cost of merchandise that was sold (including the method that was used to determine cost)






7. The higher the ratio the quicker current liabilities can be paid. This ratio also indicates the margin of safety a retailer has on hand to cover possible shrinkages






8. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)






9. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented






10. The retailers financial condition at a specific point in time






11. 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.






12. Net Profit/ Net Sales






13. (planned expenses + planned operating profit + planned stock shortages + markdowns + employee and customer discounts) / (planned net sales + stock shortages + markdowns + employee and customer discounts) x 100%






14. Having the right merchandise - at the right time - for the right price - in the right place






15. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)






16. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.






17. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.






18. The prices from lowest to highest that are carried within a merchandise category






19. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise






20. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented.






21. Buying errors - promotion errors - pricing errors - uncontrollable errors






22. Priced too high initially - priced too low - selling price of competitors






23. (Cash + Accounts Receivable) / Current Liabilities






24. Net Profit After Taxes/ Net Worth






25. The weather - merchandise is shopworn - economic downturn






26. Original Retail price- markdown selling price






27. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item






28. Dollar markup ($)/ cost price ($)






29. Can be transformed simply and rapidly into cash






30. Total Markup on all goods on hand/ retail price of all goods on hand






31. Net dollar markdown/ net dollar selling price






32. 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.






33. Evaluates the managament of capital






34. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.






35. Current Assets/ Current Liabilities






36. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model






37. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.






38. Examines the financial health of a retailer - as one of the best indicators of having too much debt in relationship to net worth. Comparres the money that vendors or banks are risking with the money that the retail owners have invested in their opera






39. Price is changed (up or down)






40. 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






41. Usually lower than original - but held for longer period






42. 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.






43. Price Lining - price zones - price ranges






44. 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






45. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.






46. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)






47. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down






48. Wrong Merchandise - odd assortment colors/sizes - seasonal goods






49. Cost + Markup






50. Net Profit After Taxes/ Total Assets