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






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






3. Can be transformed simply and rapidly into cash






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






6. 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






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






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






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






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






11. 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.






12. Price is changed (up or down)






13. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.






14. 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.






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






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






17. 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






18. Sales less cost of goods sold






19. 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






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






21. Short time - like 1 or 2 day sales






22. 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.






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






24. What the retailer owns in monetary value






25. 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






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






27. 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.






28. (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%






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






30. 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.






31. 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






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






33. Net Profit/ Net Sales






34. The weather - merchandise is shopworn - economic downturn






35. Original Retail price- markdown selling price






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






37. Cost + Markup






38. 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.






39. Current Assets/ Current Liabilities






40. Financial debts incurred by a retailer






41. Net dollar markdown/ net dollar selling price






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






43. Net Profit After Taxes/ Net Worth






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






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






46. Price Lining - price zones - price ranges






47. 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






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






49. 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






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