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






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






3. Price is changed (up or down)






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






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






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






7. 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






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






9. 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.






10. Financial debts incurred by a retailer






11. Evaluates the managament of capital






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






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






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






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






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






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






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






20. 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






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






22. Liabilities+ Owner's equity or net worth






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






24. 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






25. 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






26. 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






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






28. Can be transformed simply and rapidly into cash






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






30. 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.






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






32. Original Retail price- markdown selling price






33. Current Assets/ Current Liabilities






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






35. Cost + Markup






36. Sales for the period/ average inventory






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






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. (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%






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






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






43. Buying errors - promotion errors - pricing errors - uncontrollable errors






44. Total Expenses/ Net Sales






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






46. 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






47. Total Assets/ Net Worth






48. 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






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






50. 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