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






2. 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.






3. Current Liabilites/ Net Worth






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






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






6. 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.






7. The weather - merchandise is shopworn - economic downturn






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






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






10. 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






11. Original Retail price- markdown selling price






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






13. One that is just enough to move the goods






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






15. (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%






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






17. 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






18. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)






19. Net dollar markdown/ net dollar selling price






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






21. The retailers financial condition at a specific point in time






22. Can be transformed simply and rapidly into cash






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






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






25. Short time - like 1 or 2 day sales






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. 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






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






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






30. Net Profit/ Net Sales






31. 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






32. 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.






33. 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






34. Total Expenses/ Net Sales






35. Price is changed (up or down)






36. Sales less cost of goods sold






37. 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






38. 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.






39. Current Assets/ Current Liabilities






40. Evaluates the managament of capital






41. Financial debts incurred by a retailer






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






43. 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






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






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






46. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.






47. Net Profit After Taxes/ Net Worth






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






49. What the retailer owns in monetary value






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