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






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






3. Liabilities+ Owner's equity or net worth






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






5. Total Assets/ Net Worth






6. Net dollar markdown/ net dollar selling price






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






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






9. Revenues received by a retailer






10. Can be transformed simply and rapidly into cash






11. 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.






12. 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






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






14. 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.






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






16. Current Liabilites/ Net Worth






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






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






19. Price Lining - price zones - price ranges






20. Net Profit After Taxes/ Total Assets






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






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






23. One that is just enough to move the goods






24. Examines the financial health of a retailer - as one of the best indicators of having too much debt in relationship to net worth. Comparres the money that vendors or banks are risking with the money that the retail owners have invested in their opera






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






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. 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.






28. Cost + Markup






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






30. Merchandise Available for sale at cost/ Merchandise available for sale at retail






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






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






33. The weather - merchandise is shopworn - economic downturn






34. Sales less cost of goods sold






35. 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






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






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






38. 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






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






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






41. Price is changed (up or down)






42. Short time - like 1 or 2 day sales






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






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






45. Financial debts incurred by a retailer






46. 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






47. (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%






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






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






50. 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