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






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






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






4. 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.






5. 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






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. 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.






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






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






10. What the retailer owns in monetary value






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






12. Current Liabilites/ Net Worth






13. (Cash + Accounts Receivable) / Current Liabilities






14. Financial debts incurred by a retailer






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






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






17. Can be transformed simply and rapidly into cash






18. 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.






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






20. Total Assets/ Net Worth






21. 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.






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. Evaluates the managament of capital






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






25. Net dollar markdown/ net dollar selling price






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






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






28. Revenues received by a retailer






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






30. 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






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






32. 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.






33. Cost + Markup






34. Short time - like 1 or 2 day sales






35. One that is just enough to move the goods






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






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






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






39. Wrong Merchandise - odd assortment colors/sizes - seasonal goods






40. The weather - merchandise is shopworn - economic downturn






41. Net Profit After Taxes/ Net Worth






42. Price is changed (up or down)






43. Sales less cost of goods sold






44. 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.






45. 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






46. Costs involved in running the business






47. (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%






48. 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






49. Current Assets/ Current Liabilities






50. Total Expenses/ Net Sales