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. Net Profit After Taxes/ Net Worth






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. Revenues received by a retailer






4. Short time - like 1 or 2 day sales






5. Current Liabilites/ Net Worth






6. 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






7. 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






8. 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






9. The weather - merchandise is shopworn - economic downturn






10. Current Assets/ Current Liabilities






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






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






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






16. One that is just enough to move the goods






17. Total Assets/ Net Worth






18. 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






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






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






21. 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






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






23. Cost + Markup






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






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






26. 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






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






28. 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






29. Original Retail price- markdown selling price






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






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






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






33. Price is changed (up or down)






34. Buying errors - promotion errors - pricing errors - uncontrollable errors






35. Sales less cost of goods sold






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






37. 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






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






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






40. Evaluates the managament of capital






41. What the retailer owns in monetary value






42. 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






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






44. 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.






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






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






47. Liabilities+ Owner's equity or net worth






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






49. 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.






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