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






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






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






4. (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%






5. 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.






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






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






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






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






10. Current Assets/ Current Liabilities






11. Cost + Markup






12. 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






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






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






15. Buying errors - promotion errors - pricing errors - uncontrollable errors






16. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down






17. What the retailer owns in monetary value






18. Sales less cost of goods sold






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






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






21. 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.






22. Financial debts incurred by a retailer






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






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






25. 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






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. Costs involved in running the business






28. Net Profit After Taxes/ Total Assets






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






30. Sales for the period/ average inventory






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






32. Net Profit/ Net Sales






33. Liabilities+ Owner's equity or net worth






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






35. Total Assets/ Net Worth






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






37. 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






38. 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






39. Dollar markup ($)/ cost price ($)






40. 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






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






42. Price Lining - price zones - price ranges






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






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






45. 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






46. Price is changed (up or down)






47. Net Profit After Taxes/ Net Worth






48. The weather - merchandise is shopworn - economic downturn






49. 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






50. One that is just enough to move the goods







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