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. 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






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






3. Original Retail price- markdown selling price






4. Liabilities+ Owner's equity or net worth






5. Net Profit After Taxes/ Net Worth






6. Sales for the period/ average inventory






7. Total Expenses/ Net Sales






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






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






10. Current Liabilites/ Net Worth






11. One that is just enough to move the goods






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






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






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






15. Cost + Markup






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






17. 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






18. Net Profit After Taxes/ Total Assets






19. 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.






20. Can be transformed simply and rapidly into cash






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






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






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. Price is changed (up or down)






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






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






27. Net Profit/ Net Sales






28. 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






29. Short time - like 1 or 2 day sales






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






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






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






34. 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






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






36. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)






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






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






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






40. Financial debts incurred by a retailer






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






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






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






44. 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.






45. Total Assets/ Net Worth






46. 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






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






48. The weather - merchandise is shopworn - economic downturn






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






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