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






2. Sales less cost of goods sold






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






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






5. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






8. Current Assets/ Current Liabilities






9. 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.






10. Price Lining - price zones - price ranges






11. (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%






12. 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






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






14. 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






15. Total Expenses/ Net Sales






16. 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






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






18. 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






19. 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






20. Financial debts incurred by a retailer






21. 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






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






23. Net Profit After Taxes/ Total Assets






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






25. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)






26. 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.






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






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






29. 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






30. 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.






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






32. Can be transformed simply and rapidly into cash






33. Current Liabilites/ Net Worth






34. 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.






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






36. 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






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






38. What the retailer owns in monetary value






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






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






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






42. 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






43. One that is just enough to move the goods






44. Liabilities+ Owner's equity or net worth






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






46. Evaluates the managament of capital






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






48. Costs involved in running the business






49. 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.






50. 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.