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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 Received by the retailer-cash leaving the retailer






2. 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.






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






4. 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






5. Total Assets/ Net Worth






6. Costs involved in running the business






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






8. 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






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






10. Short time - like 1 or 2 day sales






11. 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






12. Net dollar markdown/ net dollar selling price






13. Total Expenses/ Net Sales






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






15. 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.






16. 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.






17. The weather - merchandise is shopworn - economic downturn






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






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






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






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






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






23. Current Assets/ Current Liabilities






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






25. 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






26. Net Profit/ Net Sales






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






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






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






30. Price Lining - price zones - price ranges






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






32. Original Retail price- markdown selling price






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






34. Evaluates the managament of capital






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






36. Price is changed (up or down)






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






38. 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.






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






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






41. 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






42. Can be transformed simply and rapidly into cash






43. 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






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






45. Sales less cost of goods sold






46. What the retailer owns in monetary value






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






48. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






50. 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







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