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 retailers financial condition at a specific point in time






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






3. 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.






4. 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






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






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






7. Price is changed (up or down)






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






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






10. (Cash + Accounts Receivable) / Current Liabilities






11. Current Assets/ Current Liabilities






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






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






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






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






16. 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.






17. 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.






18. 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






19. Current Liabilites/ Net Worth






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






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






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






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






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






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






26. 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






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






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






29. 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






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






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






32. 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.






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






34. Short time - like 1 or 2 day sales






35. 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






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






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






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






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






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






41. Sales for the period/ average inventory






42. 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.






43. Net Profit/ Net Sales






44. Revenues received by a retailer






45. Net dollar markdown/ net dollar selling price






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. 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






48. Evaluates the managament of capital






49. Original Retail price- markdown selling price






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