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






2. 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.






3. 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






4. Total Assets/ Net Worth






5. Sales less cost of goods sold






6. 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.






7. 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






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






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






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






11. Financial debts incurred by a retailer






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






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






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






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






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






17. (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%






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






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






21. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






23. Original Retail price- markdown selling price






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






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






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






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






28. 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






29. 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.






30. Price is changed (up or down)






31. Evaluates the managament of capital






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






33. Cost + Markup






34. 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






35. 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.






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






37. Liabilities+ Owner's equity or net worth






38. 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






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






40. Costs involved in running the business






41. Net Profit After Taxes/ Net Worth






42. 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






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






44. The awareness of the consumer to what they perceive to be the window of cost within which they will buy a particular product or service






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






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






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






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






49. Total Expenses/ Net Sales






50. 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.