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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. 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






2. Price is changed (up or down)






3. Current Liabilites/ Net Worth






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






5. 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.






6. 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






7. 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.






8. Net Profit After Taxes/ Total Assets






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






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






11. Net dollar markdown/ net dollar selling price






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






13. Revenues received by a retailer






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






15. (Cash + Accounts Receivable) / Current Liabilities






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






17. 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.






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






19. Sales less cost of goods sold






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






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






22. The weather - merchandise is shopworn - economic downturn






23. 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






24. 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.






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






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






27. Cost + Markup






28. What the retailer owns in monetary value






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






30. 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






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






32. Net Profit/ Net Sales






33. (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%






34. Net Profit After Taxes/ Net Worth






35. Financial debts incurred by a retailer






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






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






38. Can be transformed simply and rapidly into cash






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






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






41. Total Expenses/ Net Sales






42. 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.






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






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






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






46. 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






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






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






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






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







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