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






2. Sales less cost of goods sold






3. 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






4. Net Profit/ Net Sales






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






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






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






8. 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






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






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






11. Evaluates the managament of capital






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






13. 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.






14. 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






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






16. 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.






17. Original Retail price- markdown selling price






18. Financial debts incurred by a retailer






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






20. Price is changed (up or down)






21. 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.






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






23. The energizing force that fuels and sustains our economic system






24. Short time - like 1 or 2 day sales






25. 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.






26. Cost + Markup






27. 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






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






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






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






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






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






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






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






35. 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.






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






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






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






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






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






41. The weather - merchandise is shopworn - economic downturn






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






43. 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.






44. One that is just enough to move the goods






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






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






47. Current Liabilites/ Net Worth






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






49. Total Assets/ Net Worth






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