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. Net dollar markdown/ net dollar selling price






3. The weather - merchandise is shopworn - economic downturn






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






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






6. 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






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






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






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






10. Financial debts incurred by a retailer






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






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






13. 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.






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






15. 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.






16. 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






17. 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






18. Sales for the period/ average inventory






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






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






21. Price is changed (up or down)






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






23. Net Profit/ Net Sales






24. Total Assets/ Net Worth






25. 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.






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






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






28. 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






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






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






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






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






33. Sales less cost of goods sold






34. 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






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






36. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down






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






38. Total Expenses/ Net Sales






39. Revenues received by a retailer






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






41. 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






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






43. Net Profit After Taxes/ Net Worth






44. Short time - like 1 or 2 day sales






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






46. Can be transformed simply and rapidly into cash






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






48. Cost + Markup






49. 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






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