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






2. Total Expenses/ Net Sales






3. 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






4. 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






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






6. Sales for the period/ average inventory






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






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






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






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






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






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






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






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






15. 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






16. Original Retail price- markdown selling price






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






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






19. 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.






20. 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






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






22. Can be transformed simply and rapidly into cash






23. 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.






24. 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






25. Net Profit After Taxes/ Net Worth






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






27. (Cash + Accounts Receivable) / Current Liabilities






28. Price Lining - price zones - price ranges






29. The weather - merchandise is shopworn - economic downturn






30. Total Assets/ Net Worth






31. Sales less cost of goods sold






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






33. Price is changed (up or down)






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






35. Net Profit/ Net Sales






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






37. Revenues received by a retailer






38. Net dollar markdown/ net dollar selling price






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






40. Current Liabilites/ Net Worth






41. (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%






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






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






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






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






47. 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.






48. 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.






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






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