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. 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






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






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






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. Total Assets/ Net Worth






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






7. 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






8. Cost + Markup






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






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






11. Price is changed (up or down)






12. Sales less cost of goods sold






13. Sales for the period/ average inventory






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






15. Evaluates the managament of capital






16. 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.






17. 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






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






19. Short time - like 1 or 2 day sales






20. 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.






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






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






23. 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.






24. Net dollar markdown/ net dollar selling price






25. Financial debts incurred by a retailer






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






27. (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%






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






29. (Cash + Accounts Receivable) / Current Liabilities






30. Net Profit/ Net Sales






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






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






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






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






35. 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






36. 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.






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






38. 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






39. 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






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






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






42. 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






43. 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






44. Net Profit After Taxes/ Total Assets






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






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






47. Price Lining - price zones - price ranges






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






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






50. Cash Received by the retailer-cash leaving the retailer