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. Sales for the period/ average inventory






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






3. Financial debts incurred by a retailer






4. (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%






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






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






7. 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






8. Cost + Markup






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






10. Costs involved in running the business






11. Total Expenses/ Net Sales






12. 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.






13. 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






14. 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.






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






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






17. Original Retail price- markdown selling price






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






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






20. 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.






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






22. 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






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






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






25. Liabilities+ Owner's equity or net worth






26. Net Profit/ Net Sales






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






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






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






30. Short time - like 1 or 2 day sales






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






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






33. The weather - merchandise is shopworn - economic downturn






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






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






36. 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






37. 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






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






39. One that is just enough to move the goods






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






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






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






43. Evaluates the managament of capital






44. 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.






45. 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






46. Price Lining - price zones - price ranges






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






48. Net dollar markdown/ net dollar selling price






49. 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






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