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. 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






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






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






4. Short time - like 1 or 2 day sales






5. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






7. 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






8. Amount of markdown usually less - take the loss early will be easier - strengthen goodwill - replenish stock in lower price lines - leads to higher stock turnover - higher likelihood merchandise will sell in a timely manner






9. Total Expenses/ Net Sales






10. Current Assets/ Current Liabilities






11. Current Liabilites/ Net Worth






12. Price is changed (up or down)






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






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






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






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






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






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






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






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






21. Cost + Markup






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






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






24. 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






25. 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.






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






27. 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.






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






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






30. Evaluates the managament of capital






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






32. 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.






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






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. Net Profit After Taxes/ Net Worth






36. 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






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






38. Total Assets/ Net Worth






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






40. Sales for the period/ average inventory






41. Net dollar markdown/ net dollar selling price






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






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






44. 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






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






46. (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%






47. Price Lining - price zones - price ranges






48. 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.






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






50. 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.