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






2. 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






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






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






5. 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






6. Net Profit After Taxes/ Total Assets






7. Short time - like 1 or 2 day sales






8. 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.






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






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






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






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






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






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






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






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






17. 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.






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






19. (Cash + Accounts Receivable) / Current Liabilities






20. 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.






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






22. Sales less cost of goods sold






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






24. (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%






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






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






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






28. Revenues received by a retailer






29. Current Liabilites/ Net Worth






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






31. Costs involved in running the business






32. The weather - merchandise is shopworn - economic downturn






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






34. 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.






35. 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.






36. One that is just enough to move the goods






37. Net dollar markdown/ net dollar selling price






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






39. Price is changed (up or down)






40. 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






41. 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






42. What the retailer owns in monetary value






43. 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






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






45. 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






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






47. Liabilities+ Owner's equity or net worth






48. Total Expenses/ Net Sales






49. Current Assets/ Current Liabilities






50. 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







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