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






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






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






4. 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.






5. 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.






6. 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.






7. 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






8. 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






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






10. 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






11. Net Profit After Taxes/ Total Assets






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






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






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






15. 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






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






17. (Cash + Accounts Receivable) / Current Liabilities






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






19. 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






20. 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






21. Current Liabilites/ Net Worth






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






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






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






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






26. Evaluates the managament of capital






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






28. Total Expenses/ Net Sales






29. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)






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






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






32. Price Lining - price zones - price ranges






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






34. Can be transformed simply and rapidly into cash






35. Net dollar markdown/ net dollar selling price






36. 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.






37. Net Profit/ Net Sales






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






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






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






41. Sales for the period/ average inventory






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






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






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






46. 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.






47. Short time - like 1 or 2 day sales






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






49. Buying errors - promotion errors - pricing errors - uncontrollable errors






50. 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.