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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. What the retailer owns in monetary value






2. 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






3. (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%






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






5. 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.






6. 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






7. Price is changed (up or down)






8. 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.






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. Sales for the period/ average inventory






11. 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






12. 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.






13. Net Profit After Taxes/ Total Assets






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






15. Net Profit/ Net Sales






16. Costs involved in running the business






17. 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






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






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






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






21. Revenues received by a retailer






22. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






24. 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






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






26. 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






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






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






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






30. Sales less cost of goods sold






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






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






33. Can be transformed simply and rapidly into cash






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






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






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






37. Current Liabilites/ Net Worth






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






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






40. (Cash + Accounts Receivable) / Current Liabilities






41. 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






42. Short time - like 1 or 2 day sales






43. 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






44. Original Retail price- markdown selling price






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






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






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






48. 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.






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






50. Cost + Markup






Can you answer 50 questions in 15 minutes?



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