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 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






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






4. Revenues received by a retailer






5. The weather - merchandise is shopworn - economic downturn






6. 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.






7. (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%






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






9. Short time - like 1 or 2 day sales






10. 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






11. Current Assets/ Current Liabilities






12. Net Profit/ Net Sales






13. 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.






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






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






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






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






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






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






20. Current Liabilites/ Net Worth






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






22. 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.






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






24. What the retailer owns in monetary value






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






26. 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






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






28. 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






29. (Cash + Accounts Receivable) / Current Liabilities






30. Sales less cost of goods sold






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






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






33. Total Assets/ Net Worth






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






35. Can be transformed simply and rapidly into cash






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






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






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






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






40. 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






41. Cost + Markup






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






43. 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






44. 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.






45. Price Lining - price zones - price ranges






46. Original Retail price- markdown selling price






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






48. 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.






49. 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.






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