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 awareness of the consumer to what they perceive to be the window of cost within which they will buy a particular product or service






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






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






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






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






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






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






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






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






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






11. Current Assets/ Current Liabilities






12. Original Retail price- markdown selling price






13. 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






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






15. 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






16. 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.






17. Net Profit After Taxes/ Total Assets






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






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






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






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






22. Sales for the period/ average inventory






23. (Cash + Accounts Receivable) / Current Liabilities






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






25. Total Assets/ Net Worth






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. One that is just enough to move the goods






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






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






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






31. (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%






32. Promotional markdown that involves selling at or near cost for promotional purposes






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






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






35. Total Expenses/ Net Sales






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






37. Financial debts incurred by a retailer






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






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. 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






41. The weather - merchandise is shopworn - economic downturn






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






44. Revenues received by a retailer






45. 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.






46. Cash Received by the retailer-cash leaving the retailer






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






48. 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






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






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