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Retail Financials

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented






2. 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






3. Net Profit/ Net Sales






4. Costs involved in running the business






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. Current Liabilites/ Net Worth






7. (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%






8. Amount of markdown usually less - take the loss early will be easier - strengthen goodwill - replenish stock in lower price lines - leads to higher stock turnover - higher likelihood merchandise will sell in a timely manner






9. What the retailer owns in monetary value






10. Ranges of prices that appeals for a particular group of consumers






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






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






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






14. 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






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






16. 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






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






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






19. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.






20. Net Profit After Taxes/ Total Assets






21. Total Assets/ Net Worth






22. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory






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






24. Merchandise Available for sale at cost/ Merchandise available for sale at retail






25. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.






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






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






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






29. 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.






30. Improper displays - merchandise returns due to high pressure selling






31. Cash Received by the retailer-cash leaving the retailer






32. Revenues received by a retailer






33. One that is just enough to move the goods






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






35. (Cash + Accounts Receivable) / Current Liabilities






36. Evaluates the managament of capital






37. Net dollar markdown/ net dollar selling price






38. Buying errors - promotion errors - pricing errors - uncontrollable errors






39. 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.






40. Cost + Markup






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






42. 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






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






44. First price or Manufacturers suggestet Retal Price (MSRP)






45. Total Expenses/ Net Sales






46. (gross margin % x Turnover) / (100%-markup %)






47. Assets collected within one year. Due to the widespread use of credit cards - AR for retailers has diminished with exceptions such as lay-a-way.






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






49. 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






50. In Cost Method. Merchandise sold during a time period is assumed to be sold in the order the merchandise was received. Merchandise on hand for the longest period of time is sold first. Therefore - the ending inventory reflects the items in stock for







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