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. 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






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






3. Evaluates the managament of capital






4. Net Profit After Taxes/ Net Worth






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






6. Can be transformed simply and rapidly into cash






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






8. 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






9. Liabilities+ Owner's equity or net worth






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






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






12. Short time - like 1 or 2 day sales






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






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






15. Buying errors - promotion errors - pricing errors - uncontrollable errors






16. 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






17. Costs involved in running the business






18. 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.






19. 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.






20. Total Assets/ Net Worth






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






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






23. Cost + Markup






24. Current Assets/ Current Liabilities






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






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






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. Net dollar markdown/ net dollar selling price






29. 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






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






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






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






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






34. Sales less cost of goods sold






35. 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






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






37. 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






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






39. 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.






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






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






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






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






44. Sales for the period/ average inventory






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






46. (Cash + Accounts Receivable) / Current Liabilities






47. 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.






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






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






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