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. Dollar markup ($)/ retail price ($)






2. Liabilities+ Owner's equity or net worth






3. 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






4. Original Retail price- markdown selling price






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 retailers financial condition at a specific point in time






7. 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






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






9. 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.






10. Buying errors - promotion errors - pricing errors - uncontrollable errors






11. 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






12. 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.






13. 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






14. Current Liabilites/ Net Worth






15. Price is changed (up or down)






16. Cost Price/ (100%-markup %)






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






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






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






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






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






22. Cost + Markup






23. (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%






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






25. 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.






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






27. Net Profit/ Net Sales






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






29. 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






30. 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






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






32. Costs involved in running the business






33. Net Profit After Taxes/ Net Worth






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






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






36. Revenues received by a retailer






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






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






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






40. Evaluates the managament of capital






41. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes






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






43. 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






44. The weather - merchandise is shopworn - economic downturn






45. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)






46. Current Assets/ Current Liabilities






47. Total Assets/ Net Worth






48. 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






49. Financial debts incurred by a retailer






50. The largest sum of money in current assets. Can be presented in either cost or retail terms. Should be purchased for a short period of time - as products lose monetary value over time and are subject to markdowns.