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. The weather - merchandise is shopworn - economic downturn






2. 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






3. 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






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






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






6. Price Lining - price zones - price ranges






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






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






9. 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.






10. 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






11. 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.






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






13. 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






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






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






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






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






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






19. Cost + Markup






20. Financial debts incurred by a retailer






21. 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.






22. 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






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






24. (Cash + Accounts Receivable) / Current Liabilities






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






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






27. Buying errors - promotion errors - pricing errors - uncontrollable errors






28. Revenues received by a retailer






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






30. Costs involved in running the business






31. Liabilities+ Owner's equity or net worth






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






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






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






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






37. Original Retail price- markdown selling price






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






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






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






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






42. 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.






43. Total Assets/ Net Worth






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






45. What the retailer owns in monetary value






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. Sales less cost of goods sold






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






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






50. Evaluates the managament of capital