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






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






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






6. 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.






7. Can be transformed simply and rapidly into cash






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






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






10. Net Profit After Taxes/ Net Worth






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






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






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






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






15. 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






16. Net dollar markdown/ net dollar selling price






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






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






19. Wrong Merchandise - odd assortment colors/sizes - seasonal goods






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






21. Short time - like 1 or 2 day sales






22. Financial debts incurred by a retailer






23. Total Expenses/ Net Sales






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






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






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






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






28. 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






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






30. 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






31. Cost + Markup






32. Original Retail price- markdown selling price






33. Costs involved in running the business






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






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






36. 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






37. 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.






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






39. 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






40. Sales less cost of goods sold






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






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






43. Sales for the period/ average inventory






44. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.






45. What the retailer owns in monetary value






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






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






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






49. Revenues received by a retailer






50. (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%