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. Sales less cost of goods sold






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






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






4. What the retailer owns in monetary value






5. 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.






6. Current Assets/ Current Liabilities






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






8. Sales for the period/ average inventory






9. Price is changed (up or down)






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






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






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






13. 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.






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






15. Liabilities+ Owner's equity or net worth






16. Price Lining - price zones - price ranges






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






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






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






20. 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.






21. 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






22. 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






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






24. 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






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






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






27. Original Retail price- markdown selling price






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






29. 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






30. Cost + Markup






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






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






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






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






35. 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






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






37. Total Assets/ Net Worth






38. 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






39. 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






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






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






42. 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.






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






44. 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






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






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






47. Buying errors - promotion errors - pricing errors - uncontrollable errors






48. Revenues received by a retailer






49. Can be transformed simply and rapidly into cash






50. (Cash + Accounts Receivable) / Current Liabilities