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. Short time - like 1 or 2 day sales






2. Original Retail price- markdown selling price






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






4. Net Profit/ Net Sales






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






6. 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






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






8. Net Profit After Taxes/ Net Worth






9. Net Profit After Taxes/ Total Assets






10. Price Lining - price zones - price ranges






11. 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






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






13. 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.






14. Revenues received by a retailer






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






16. 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






17. The weather - merchandise is shopworn - economic downturn






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






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






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






21. 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.






22. Price is changed (up or down)






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






24. Total Expenses/ Net Sales






25. 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






26. Financial debts incurred by a retailer






27. 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






28. 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






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






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






31. One that is just enough to move the goods






32. What the retailer owns in monetary value






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






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






35. 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






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






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






38. Sales less cost of goods sold






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






40. Total Assets/ Net Worth






41. 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.






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






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






44. 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






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






46. Net dollar markdown/ net dollar selling price






47. Cost + Markup






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






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






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