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






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






3. Current Assets/ Current Liabilities






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






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






6. 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






7. Sales for the period/ average inventory






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






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






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






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






12. 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.






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






14. 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.






15. 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.






16. Revenues received by a retailer






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






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






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






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






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






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






23. Price Lining - price zones - price ranges






24. Price is changed (up or down)






25. 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






26. 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






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






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






29. The weather - merchandise is shopworn - economic downturn






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






31. Cost + Markup






32. Net Profit After Taxes/ Total Assets






33. What the retailer owns in monetary value






34. 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






35. 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.






36. One that is just enough to move the goods






37. Liabilities+ Owner's equity or net worth






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






39. 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.






40. Can be transformed simply and rapidly into cash






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






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






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






44. 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






45. 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






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






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






48. (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%






49. Original Retail price- markdown selling price






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