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Retail Financials

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. 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.






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






3. 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






4. 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.






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






6. Liabilities+ Owner's equity or net worth






7. Price is changed (up or down)






8. Sales for the period/ average inventory






9. Evaluates the managament of capital






10. 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.






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






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






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






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






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






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






17. 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






18. Sales less cost of goods sold






19. 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






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






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






22. 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.






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






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






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






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






27. Original Retail price- markdown selling price






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






29. Revenues received by a retailer






30. Current Assets/ Current Liabilities






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






32. 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






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






34. Can be transformed simply and rapidly into cash






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






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






37. One that is just enough to move the goods






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






39. Financial debts incurred by a retailer






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






41. Net Profit After Taxes/ Net Worth






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






43. 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.






44. 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






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






46. Cost + Markup






47. Total Assets/ Net Worth






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






49. 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






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







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