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 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






2. Net dollar markdown/ net dollar selling price






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






4. Current Assets/ Current Liabilities






5. Original Retail price- markdown selling price






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






7. Price Lining - price zones - price ranges






8. 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.






9. Total Expenses/ Net Sales






10. Financial debts incurred by a retailer






11. 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.






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






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






14. Sales for the period/ average inventory






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






16. 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






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






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






19. Net Profit After Taxes/ Net Worth






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






21. 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






22. 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






23. 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.






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






25. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)






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






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






28. Cost + Markup






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






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






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






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






33. Net Profit/ Net Sales






34. (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%






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






36. 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






37. 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






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






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






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






42. Evaluates the managament of capital






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






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






46. 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






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






48. Net Profit After Taxes/ Total Assets






49. The weather - merchandise is shopworn - economic downturn






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