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. (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%






2. Costs involved in running the business






3. 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






4. What the retailer owns in monetary value






5. Ensures that there is enough cash to pay debts. Any time the ratio is colse to 1 - the retailer is said to be in a liquid position.






6. Price is changed (up or down)






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






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






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






10. 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






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






12. Liabilities+ Owner's equity or net worth






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






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






15. 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






16. Net dollar markdown/ net dollar selling price






17. 1. Determine merchandise available for sale at both cost and retail prices. 2.Calculate the cost to retail complement or percentage relationship of the cost of merchandise to the selling price. 3. Subtract markdowns taken during the period. 4. Determ






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






19. The number of items remaining in stock x dollar markdown






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






21. 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






22. 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.






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






24. 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






25. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)






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






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






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






29. Financial debts incurred by a retailer






30. Net Profit After Taxes/ Net Worth






31. Short time - like 1 or 2 day sales






32. The awareness of the consumer to what they perceive to be the window of cost within which they will buy a particular product or service






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






34. 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






35. 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.






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






37. The energizing force that fuels and sustains our economic system






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






39. 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






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






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






42. Total Assets/ Net Worth






43. Total Expenses/ Net Sales






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






45. Indicates gross margin derived from the sales of merchandise and it's ability to cover operating expenses. Helps a retailer determine how much rent they should pay - what salary the owner should draw - and how much they should pay their associates.






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






47. Current Assets/ Current Liabilities






48. Current Liabilites/ Net Worth






49. Price Lining - price zones - price ranges






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