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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. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)






2. 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






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






4. Net Profit/ Net Sales






5. Net dollar markdown/ net dollar selling price






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






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






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






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






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






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






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






13. 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.






14. 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.






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






16. Current Assets/ Current Liabilities






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






18. Net Profit After Taxes/ Net Worth






19. 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






20. Current Liabilites/ Net Worth






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. Usually lower than original - but held for longer period






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






24. Cost + Markup






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






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






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






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






29. 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.






30. Total Expenses/ Net Sales






31. 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






32. 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






33. Can be transformed simply and rapidly into cash






34. Liabilities+ Owner's equity or net worth






35. Sales for the period/ average inventory






36. Evaluates the managament of capital






37. 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.






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






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






40. 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.






41. 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






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






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






44. Price is changed (up or down)






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






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






47. Financial debts incurred by a retailer






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






49. 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






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






Can you answer 50 questions in 15 minutes?



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