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






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






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






4. 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






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






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






8. Total Assets/ Net Worth






9. Net Profit/ Net Sales






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






11. 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






12. Can be transformed simply and rapidly into cash






13. Original Retail price- markdown selling price






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






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






16. 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






17. Current Assets/ Current Liabilities






18. Total Expenses/ Net Sales






19. Liabilities+ Owner's equity or net worth






20. Buying errors - promotion errors - pricing errors - uncontrollable errors






21. Revenues received by a retailer






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






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






24. Evaluates the managament of capital






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. 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.






27. (Cash + Accounts Receivable) / Current Liabilities






28. One that is just enough to move the goods






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






30. Cost + Markup






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






32. 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.






33. 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






34. Short time - like 1 or 2 day sales






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






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






37. Financial debts incurred by a retailer






38. What the retailer owns in monetary value






39. 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






40. 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






41. Sales for the period/ average inventory






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






43. (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%






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






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






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






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






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






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






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







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