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






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






3. Can be transformed simply and rapidly into cash






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






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






6. 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






7. Short time - like 1 or 2 day sales






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






9. 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






10. What the retailer owns in monetary value






11. Net dollar markdown/ net dollar selling price






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






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






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






15. 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






16. Sales less cost of goods sold






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






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






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






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






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. Price Lining - price zones - price ranges






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






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






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






26. 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






27. Evaluates the managament of capital






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






29. 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






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






31. 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






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






33. Price is changed (up or down)






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






35. Sales for the period/ average inventory






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






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






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






39. 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.






40. (Cash + Accounts Receivable) / Current Liabilities






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






42. 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.






43. Current Assets/ Current Liabilities






44. 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






45. The weather - merchandise is shopworn - economic downturn






46. 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






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






48. 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






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






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