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. 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






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






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






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






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






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. Original Retail price- markdown selling price






8. 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.






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






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






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






12. 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






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






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






15. Revenues received by a retailer






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






17. 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






18. 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






19. Net dollar markdown/ net dollar selling price






20. 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






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






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






23. 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.






24. Cost + Markup






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






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






27. Price is changed (up or down)






28. What the retailer owns in monetary value






29. 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






30. 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






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






32. One that is just enough to move the goods






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






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






35. The weather - merchandise is shopworn - economic downturn






36. Liabilities+ Owner's equity or net worth






37. Net Profit/ Net Sales






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






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






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






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






43. Net Profit After Taxes/ Total Assets






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






45. 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






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






47. 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






48. 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






49. Costs involved in running the business






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