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






2. 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.






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






4. 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






5. 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






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






7. Costs involved in running the business






8. Net Profit After Taxes/ Total Assets






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






10. Evaluates the managament of capital






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






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






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






14. Current Assets/ Current Liabilities






15. Can be transformed simply and rapidly into cash






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






17. Sales less cost of goods sold






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






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






20. 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






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






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






23. 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.






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






25. What the retailer owns in monetary value






26. 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






27. 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






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






29. One that is just enough to move the goods






30. Net dollar markdown/ net dollar selling price






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






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






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






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






35. 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






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






37. Original Retail price- markdown selling price






38. Net Profit/ Net Sales






39. Cost + Markup






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






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






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






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






44. Total Expenses/ Net Sales






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






46. Financial debts incurred by a retailer






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






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






49. 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.






50. Price Lining - price zones - price ranges