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. Price Lining - price zones - price ranges






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






3. Can be transformed simply and rapidly into cash






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






5. 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






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






7. Total Expenses/ Net Sales






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






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






10. 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






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






12. Sales less cost of goods sold






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






14. 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






15. Original Retail price- markdown selling price






16. Net Profit After Taxes/ Total Assets






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






18. Sales for the period/ average inventory






19. 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






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






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






22. 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






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






24. 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






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






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






27. 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






28. The weather - merchandise is shopworn - economic downturn






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






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






31. Total Assets/ Net Worth






32. (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%






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






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






35. Liabilities+ Owner's equity or net worth






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






37. Revenues received by a retailer






38. Current Liabilites/ Net Worth






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






40. Net Profit/ Net Sales






41. 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.






42. Net dollar markdown/ net dollar selling price






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






44. 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






45. Price is changed (up or down)






46. Evaluates the managament of capital






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






48. Net Profit After Taxes/ Net Worth






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






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