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






2. (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%






3. Sales for the period/ average inventory






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






5. 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.






6. Total Expenses/ Net Sales






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






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






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






10. Original Retail price- markdown selling price






11. 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






12. 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






13. 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






14. 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






15. Usually lower than original - but held for longer period






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. The number of items remaining in stock x dollar markdown






18. 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






19. Merchandise Available for sale at cost/ Merchandise available for sale at retail






20. 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






21. 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






22. Net Profit After Taxes/ Total Assets






23. Price Lining - price zones - price ranges






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






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






26. 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.






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






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






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






30. One that is just enough to move the goods






31. Total Assets/ Net Worth






32. Evaluates the managament of capital






33. 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.






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






35. Net dollar markdown/ net dollar selling price






36. Current Liabilites/ Net Worth






37. 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.






38. Net Profit/ Net Sales






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






40. What the retailer owns in monetary value






41. Costs involved in running the business






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






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






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






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






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






47. 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






48. (Cash + Accounts Receivable) / Current Liabilities






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






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.