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






2. 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






3. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)






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






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






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






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






8. Liabilities+ Owner's equity or net worth






9. 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






10. Evaluates the managament of capital






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






12. The weather - merchandise is shopworn - economic downturn






13. 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






14. Price is changed (up or down)






15. Financial debts incurred by a retailer






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






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






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






19. 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






20. 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.






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






22. Costs involved in running the business






23. Original Retail price- markdown selling price






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






25. Promotional markdown that involves selling at or near cost for promotional purposes






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






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






28. Can be transformed simply and rapidly into cash






29. 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






30. 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






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






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






33. Current Assets/ Current Liabilities






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. 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.






36. What the retailer owns in monetary value






37. (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%






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






39. 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






40. Sales for the period/ average inventory






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






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






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






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






45. 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.






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






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






48. (Cash + Accounts Receivable) / Current Liabilities






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






50. Buying errors - promotion errors - pricing errors - uncontrollable errors