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. 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






2. Original Retail price- markdown selling price






3. Price is changed (up or down)






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






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






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






7. Net Profit After Taxes/ Net Worth






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






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






11. 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.






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






13. Net dollar markdown/ net dollar selling price






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






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






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






17. What the retailer owns in monetary value






18. Price Lining - price zones - price ranges






19. 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.






20. 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






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






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






23. 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






24. Revenues received by a retailer






25. Net Profit/ Net Sales






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






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






28. 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






29. 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






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






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






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






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






34. Short time - like 1 or 2 day sales






35. Current Liabilites/ Net Worth






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






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






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






39. 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.






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






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






42. 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.






43. Total Assets/ Net Worth






44. Costs involved in running the business






45. 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






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






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






48. The cost of merchandise that was sold (including the method that was used to determine cost)






49. Cost + Markup






50. 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.