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






2. Sales for the period/ average inventory






3. Original Retail price- markdown selling price






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






5. What the retailer owns in monetary value






6. Can be transformed simply and rapidly into cash






7. Price Lining - price zones - price ranges






8. 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






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






10. Short time - like 1 or 2 day sales






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






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. Net Profit After Taxes/ Total Assets






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






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. Cash Received by the retailer-cash leaving the retailer






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






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






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






20. Buying errors - promotion errors - pricing errors - uncontrollable errors






21. 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






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






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






24. 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






25. Sales less cost of goods sold






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






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






29. Net Profit After Taxes/ Net Worth






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






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






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






33. (Cash + Accounts Receivable) / Current Liabilities






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






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






36. 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.






37. 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.






38. 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.






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






40. 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.






41. 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






42. Net Profit/ Net Sales






43. 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






44. One that is just enough to move the goods






45. 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






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






47. Costs involved in running the business






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






49. Evaluates the managament of capital






50. (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%