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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. Original Retail price- markdown selling price






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






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






4. 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






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






6. What the retailer owns in monetary value






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






8. One that is just enough to move the goods






9. Total Expenses/ Net Sales






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






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






12. 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






13. 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






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






15. The weather - merchandise is shopworn - economic downturn






16. (Cash + Accounts Receivable) / Current Liabilities






17. 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.






18. (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%






19. Revenues received by a retailer






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






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






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






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






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






25. 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






26. Promotional markdown that involves selling at or near cost for promotional purposes






27. 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






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






29. 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






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






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






32. 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






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






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






35. Can be transformed simply and rapidly into cash






36. Short time - like 1 or 2 day sales






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. 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






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






40. 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.






41. Net Profit After Taxes/ Total Assets






42. Cost + Markup






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






44. Net dollar markdown/ net dollar selling price






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






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






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






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






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






50. 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.







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