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. 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.






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






3. 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.






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






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






6. Liabilities+ Owner's equity or net worth






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






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






9. 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






10. Cost + Markup






11. 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






12. Price Lining - price zones - price ranges






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






14. 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






15. 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






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






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






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






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






20. Evaluates the managament of capital






21. Net dollar markdown/ net dollar selling price






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






23. 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






24. Price is changed (up or down)






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






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






27. 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






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






29. Net Profit/ Net Sales






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






31. 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






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






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






34. Sales for the period/ average inventory






35. Total Assets/ Net Worth






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






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






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






40. Net Profit After Taxes/ Net Worth






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






42. 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






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






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






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






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






47. Can be transformed simply and rapidly into cash






48. 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.






49. One that is just enough to move the goods






50. 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.