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






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






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






4. Total Expenses/ Net Sales






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






6. Cost + Markup






7. 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.






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






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






10. Total Assets/ Net Worth






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






12. 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.






13. 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






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






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






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






17. 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






18. Can be transformed simply and rapidly into cash






19. 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.






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






21. (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%






22. Financial debts incurred by a retailer






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






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






25. Price is changed (up or down)






26. 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






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






28. 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






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. What the retailer owns in monetary value






31. Current Liabilites/ Net Worth






32. 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






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






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






35. 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






36. 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






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






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






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






40. 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.






41. Buying errors - promotion errors - pricing errors - uncontrollable errors






42. Evaluates the managament of capital






43. 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.






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






45. 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






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






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






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






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






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