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. 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.






3. 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.






4. Liabilities+ Owner's equity or net worth






5. Current Assets/ Current Liabilities






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






7. Original Retail price- markdown selling price






8. (Cash + Accounts Receivable) / Current Liabilities






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






10. 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






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






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






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






14. (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%






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






16. 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






17. Total Assets/ Net Worth






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






19. Evaluates the managament of capital






20. Price is changed (up or down)






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






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






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






24. Net Profit After Taxes/ Total Assets






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






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






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






28. 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






29. 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






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






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






32. Sales less cost of goods sold






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






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






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






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






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. 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.






39. What the retailer owns in monetary value






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






41. 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.






42. Cost + Markup






43. Net Profit After Taxes/ Net Worth






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






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. The energizing force that fuels and sustains our economic system






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






48. 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






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






50. Net Profit/ Net Sales