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. Cost + Markup






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






4. 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






5. 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.






6. 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






7. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






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






11. Sales for the period/ average inventory






12. Total Expenses/ Net Sales






13. 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






14. Price is changed (up or down)






15. Net Profit/ Net Sales






16. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.






17. The weather - merchandise is shopworn - economic downturn






18. 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.






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






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






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






22. Net Profit After Taxes/ Total Assets






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






24. Liabilities+ Owner's equity or net worth






25. What the retailer owns in monetary value






26. 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.






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






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






29. One that is just enough to move the goods






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






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






32. 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






33. (Cash + Accounts Receivable) / Current Liabilities






34. Evaluates the managament of capital






35. Current Liabilites/ Net Worth






36. Financial debts incurred by a retailer






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






38. 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






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






40. 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






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






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






43. 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






44. Can be transformed simply and rapidly into cash






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. 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.






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






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






49. 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






50. Costs involved in running the business