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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. Net Profit After Taxes/ Net Worth






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






3. The weather - merchandise is shopworn - economic downturn






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






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






6. Total Assets/ Net Worth






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






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






9. Sales for the period/ average inventory






10. Cost + Markup






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






12. Revenues received by a retailer






13. Net Profit/ Net Sales






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






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






16. (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%






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






18. 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






19. Can be transformed simply and rapidly into cash






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






21. 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






22. 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






23. 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.






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






25. Costs involved in running the business






26. 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.






27. Net Profit After Taxes/ Total Assets






28. Liabilities+ Owner's equity or net worth






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






30. 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.






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






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






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






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






35. 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






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






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






38. 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






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






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






41. Net dollar markdown/ net dollar selling price






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






43. Price Lining - price zones - price ranges






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






45. 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.






46. Total Expenses/ Net Sales






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






48. 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






49. (Cash + Accounts Receivable) / Current Liabilities






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







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