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. 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.






2. 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






3. Net Profit After Taxes/ Net Worth






4. Net dollar markdown/ net dollar selling price






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






6. Price is changed (up or down)






7. Net Profit After Taxes/ Total Assets






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






9. Costs involved in running the business






10. 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






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






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






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






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






15. 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






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






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






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. Usually lower than original - but held for longer period






20. Current Liabilites/ Net Worth






21. Original Retail price- markdown selling price






22. Buying errors - promotion errors - pricing errors - uncontrollable errors






23. 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






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






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






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






27. Price Lining - price zones - price ranges






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






29. 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






30. The weather - merchandise is shopworn - economic downturn






31. 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.






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






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






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






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






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






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






38. Net Profit/ Net Sales






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






40. Total Expenses/ Net Sales






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






42. Sales for the period/ average inventory






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






44. Short time - like 1 or 2 day sales






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






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






47. One that is just enough to move the goods






48. 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.






49. 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






50. Total Assets/ Net Worth