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






2. 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






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






4. Net dollar markdown/ net dollar selling price






5. 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.






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






7. Short time - like 1 or 2 day sales






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






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






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






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






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






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






14. 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






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






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






17. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)






18. 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






19. Liabilities+ Owner's equity or net worth






20. Price Lining - price zones - price ranges






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






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






23. 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






24. 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






25. 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






26. 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.






27. 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.






28. Current Liabilites/ Net Worth






29. 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.






30. 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






31. 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






32. Usually lower than original - but held for longer period






33. (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%






34. The higher the ratio the quicker current liabilities can be paid. This ratio also indicates the margin of safety a retailer has on hand to cover possible shrinkages






35. Revenues received by a retailer






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






37. 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






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






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






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






41. Can be transformed simply and rapidly into cash






42. 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.






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






44. Sales for the period/ average inventory






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






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






47. 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.






48. 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.






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






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







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Can you answer 50 questions in 15 minutes?


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