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






2. The weather - merchandise is shopworn - economic downturn






3. 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






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






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






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






7. 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






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






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






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






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






13. One that is just enough to move the goods






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






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






16. Net Profit After Taxes/ Net Worth






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






18. 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






19. Price Lining - price zones - price ranges






20. 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






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






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






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






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






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






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






28. 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






29. 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






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. 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.






32. (Cash + Accounts Receivable) / Current Liabilities






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






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






35. 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.






36. Original Retail price- markdown selling price






37. Sales less cost of goods sold






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






39. Liabilities+ Owner's equity or net worth






40. 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






41. Costs involved in running the business






42. Financial debts incurred by a retailer






43. The energizing force that fuels and sustains our economic system






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






45. Net Profit/ Net Sales






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






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






48. Sales for the period/ average inventory






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






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