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. Price Lining - price zones - price ranges






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






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






4. 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






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






6. 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.






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






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






9. One that is just enough to move the goods






10. 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






11. 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






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






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






14. Price is changed (up or down)






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






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






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






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






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






20. 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.






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






22. Financial debts incurred by a retailer






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






24. 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






25. Cost + Markup






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






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






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






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






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. Sales less cost of goods sold






32. Revenues received by a retailer






33. Current Liabilites/ Net Worth






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






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






36. 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.






37. 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






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






39. Total Assets/ Net Worth






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






41. (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%






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






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






44. 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.






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






46. The weather - merchandise is shopworn - economic downturn






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






48. Current Assets/ Current Liabilities






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






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