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






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






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






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






5. Current Liabilites/ Net Worth






6. Short time - like 1 or 2 day sales






7. The weather - merchandise is shopworn - economic downturn






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






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






10. Evaluates the managament of capital






11. 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






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






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






14. 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.






15. One that is just enough to move the goods






16. 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






17. Original Retail price- markdown selling price






18. Sales for the period/ average inventory






19. 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






20. 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.






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






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






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






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






25. 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






26. 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






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






28. 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.






29. 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






30. Can be transformed simply and rapidly into cash






31. 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






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






33. Costs involved in running the business






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






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






36. Net Profit/ Net Sales






37. Liabilities+ Owner's equity or net worth






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






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






41. 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.






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






43. Total Assets/ Net Worth






44. 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






45. Cost + Markup






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






47. Total Expenses/ Net Sales






48. What the retailer owns in monetary value






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






50. 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







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