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






2. Net Profit After Taxes/ Total Assets






3. (Cash + Accounts Receivable) / Current Liabilities






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






5. Total Expenses/ Net Sales






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






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






8. 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






9. Original Retail price- markdown selling price






10. 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






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






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






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






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






15. 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






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






17. Current Liabilites/ Net Worth






18. One that is just enough to move the goods






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






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






21. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)






22. 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






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






24. What the retailer owns in monetary value






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






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. Usually lower than original - but held for longer period






29. Sales less cost of goods sold






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






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






32. Liabilities+ Owner's equity or net worth






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






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






35. Price is changed (up or down)






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. Short time - like 1 or 2 day sales






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






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






40. 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.






41. 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.






42. 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






43. Can be transformed simply and rapidly into cash






44. Financial debts incurred by a retailer






45. 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






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






47. Revenues received by a retailer






48. (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%






49. Evaluates the managament of capital






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







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