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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 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.






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






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






4. Liabilities+ Owner's equity or net worth






5. 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






6. 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.






7. Total Assets/ Net Worth






8. Buying errors - promotion errors - pricing errors - uncontrollable errors






9. Having the right merchandise - at the right time - for the right price - in the right place






10. The number of items remaining in stock x dollar markdown






11. Net Profit After Taxes/ Net Worth






12. 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.






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






14. Revenues received by a retailer






15. One that is just enough to move the goods






16. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.






17. Original Retail price- markdown selling price






18. 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






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. 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






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






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






23. Price Lining - price zones - price ranges






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






25. 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






26. Short time - like 1 or 2 day sales






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






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






29. Sales less cost of goods sold






30. The weather - merchandise is shopworn - economic downturn






31. (Cash + Accounts Receivable) / Current Liabilities






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






33. 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






34. 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.






35. 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.






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






37. 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.






38. 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






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






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






41. 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






42. Total Expenses/ Net Sales






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






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






45. Sales for the period/ average inventory






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






47. Net Profit/ Net Sales






48. Costs involved in running the business






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






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







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