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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. (Cash + Accounts Receivable) / Current Liabilities






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






3. Current Liabilites/ Net Worth






4. Sales less cost of goods sold






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






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






7. Cost + Markup






8. 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.






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






10. 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.






11. 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






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






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






16. Net Profit/ Net Sales






17. Net Profit After Taxes/ Total Assets






18. 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.






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






20. Original Retail price- markdown selling price






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






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






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






24. The weather - merchandise is shopworn - economic downturn






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






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






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






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






29. Revenues received by a retailer






30. 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






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






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






33. 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.






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






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






36. 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






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






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






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






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






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






42. One that is just enough to move the goods






43. 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.






44. 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






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






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






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






48. Total Assets/ Net Worth






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






50. Net dollar markdown/ net dollar selling price







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