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. Price is changed (up or down)






3. 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






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






5. 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






6. What the retailer owns in monetary value






7. Revenues received by a retailer






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






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






10. Cost + Markup






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






12. Current Assets/ Current Liabilities






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






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






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






16. 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






17. Price Lining - price zones - price ranges






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






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






20. 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






21. 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






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






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






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






25. 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.






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






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






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






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






30. 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.






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






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






34. Total Expenses/ Net Sales






35. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






37. Costs involved in running the business






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






39. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)






40. 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






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






42. 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.






43. 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.






44. 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






45. 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






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






47. Net Profit After Taxes/ Total Assets






48. Original Retail price- markdown selling price






49. Sales for the period/ average inventory






50. Current Liabilites/ Net Worth