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. Original Retail price- markdown selling price






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






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






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






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






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






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






8. Revenues received by a retailer






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






10. (Cash + Accounts Receivable) / Current Liabilities






11. 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






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






13. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)






14. 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






15. 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






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






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






18. What the retailer owns in monetary value






19. 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.






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






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






22. 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.






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






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






25. Cost + Markup






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






27. 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.






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






29. Sales less cost of goods sold






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






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






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






33. Financial debts incurred by a retailer






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






35. The weather - merchandise is shopworn - economic downturn






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






37. Total Expenses/ Net Sales






38. 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.






39. Sales for the period/ average inventory






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






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






42. 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






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






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






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






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






47. Liabilities+ Owner's equity or net worth






48. 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






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






50. 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.