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Retail Financials

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. 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






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






3. Sales for the period/ average inventory






4. 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






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






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






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






8. What the retailer owns in monetary value






9. 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






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






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 weather - merchandise is shopworn - economic downturn






13. One that is just enough to move the goods






14. 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.






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






16. 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.






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






18. 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.






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






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






21. 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






22. 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.






23. Price is changed (up or down)






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






25. Net dollar markdown/ net dollar selling price






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






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






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






29. Total Expenses/ Net Sales






30. (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%






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






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






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






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






35. 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.






36. 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






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






38. (Cash + Accounts Receivable) / Current Liabilities






39. Cost + Markup






40. Net Profit/ Net Sales






41. Current Liabilites/ Net Worth






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






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






44. 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






45. 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






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






47. Net Profit After Taxes/ Total Assets






48. Short time - like 1 or 2 day sales






49. Original Retail price- markdown selling price






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







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