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. Total Expenses/ Net Sales






2. 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






3. Liabilities+ Owner's equity or net worth






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






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






6. 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






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






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






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






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






11. Revenues received by a retailer






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






13. Can be transformed simply and rapidly into cash






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






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






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






18. The weather - merchandise is shopworn - economic downturn






19. (Cash + Accounts Receivable) / Current Liabilities






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






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






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






23. 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.






24. 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.






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






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






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






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






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






30. 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






31. One that is just enough to move the goods






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






33. 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






34. Short time - like 1 or 2 day sales






35. 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.






36. 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.






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






38. Sales less cost of goods sold






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






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






41. 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






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






43. Current Liabilites/ Net Worth






44. (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%






45. 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.






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






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






48. Cost + Markup






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






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