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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. 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






2. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes






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






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






5. 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.






6. Price reduction for merchandise that has not lived up to buyers' expectations. Includes broken assortments of merchandise - merchandise lines that buyers no longer want to carry - shopworn goods - items that haven't sold because of an event beyond bu






7. Can be transformed simply and rapidly into cash






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






9. Revenues received by a retailer






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






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






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






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






14. Total Expenses/ Net Sales






15. Price is changed (up or down)






16. 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






17. Original Retail price- markdown selling price






18. 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






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






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






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






23. Evaluates the managament of capital






24. Net dollar markdown/ net dollar selling price






25. Sales less cost of goods sold






26. 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






27. Short time - like 1 or 2 day sales






28. 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.






29. (Cash + Accounts Receivable) / Current Liabilities






30. Net Profit/ Net Sales






31. 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






32. Cost + Markup






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






34. 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






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






36. 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






37. Cash Received by the retailer-cash leaving the retailer






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






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






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






41. 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.






42. Financial debts incurred by a retailer






43. 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.






44. One that is just enough to move the goods






45. Current Liabilites/ Net Worth






46. (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%






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






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






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






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







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