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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. Financial debts incurred by a retailer






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






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






4. The weather - merchandise is shopworn - economic downturn






5. 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






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






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






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






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






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






11. Total Expenses/ Net Sales






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






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






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






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






16. 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.






17. Total Assets/ Net Worth






18. Price is changed (up or down)






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






20. 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






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






22. 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






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






24. What the retailer owns in monetary value






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






26. Liabilities+ Owner's equity or net worth






27. 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






28. Original Retail price- markdown selling price






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






30. 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






31. Current Liabilites/ Net Worth






32. 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






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






34. 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






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






36. 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






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






38. 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.






39. Current Assets/ Current Liabilities






40. Can be transformed simply and rapidly into cash






41. 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.






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






43. (Cash + Accounts Receivable) / Current Liabilities






44. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






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






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







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