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






2. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






5. 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






6. Short time - like 1 or 2 day sales






7. 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






8. Net dollar markdown/ net dollar selling price






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






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






11. 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.






12. 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






13. 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






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






15. 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.






16. Net Profit After Taxes/ Net Worth






17. Price Lining - price zones - price ranges






18. 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






19. Cost + Markup






20. Financial debts incurred by a retailer






21. 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






22. (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%






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






24. 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.






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






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






27. 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






28. 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






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






30. Sales for the period/ average inventory






31. Original Retail price- markdown selling price






32. Net Profit After Taxes/ Total Assets






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






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






35. 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






36. 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






37. The weather - merchandise is shopworn - economic downturn






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






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






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






41. What the retailer owns in monetary value






42. Sales less cost of goods sold






43. Liabilities+ Owner's equity or net worth






44. 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.






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






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






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






48. Total Assets/ Net Worth






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






50. Costs involved in running the business