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






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






3. 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






4. 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






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






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






7. Liabilities+ Owner's equity or net worth






8. Financial debts incurred by a retailer






9. Revenues received by a retailer






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






11. 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






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






13. 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.






14. Costs involved in running the business






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






16. Net dollar markdown/ net dollar selling price






17. 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






18. 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.






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






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






21. 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.






22. Price is changed (up or down)






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






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






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






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






27. Cost + Markup






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






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. Usually lower than original - but held for longer period






32. Total Expenses/ Net Sales






33. 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






34. 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.






35. 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






36. Sales for the period/ average inventory






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






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






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






40. 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.






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






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






43. 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






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






45. The weather - merchandise is shopworn - economic downturn






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






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






48. 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.






49. Net Profit After Taxes/ Net Worth






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






Can you answer 50 questions in 15 minutes?



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