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






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






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






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






5. Buying errors - promotion errors - pricing errors - uncontrollable errors






6. Price Lining - price zones - price ranges






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






8. (Cash + Accounts Receivable) / Current Liabilities






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






10. Costs involved in running the business






11. (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%






12. 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






13. The weather - merchandise is shopworn - economic downturn






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






15. 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.






16. Net Profit After Taxes/ Total Assets






17. 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






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






19. Net dollar markdown/ net dollar selling price






20. 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.






21. 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






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






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






24. Sales less cost of goods sold






25. 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.






26. 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






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






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






29. Total Expenses/ Net Sales






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. 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






32. Total Assets/ Net Worth






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






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






35. 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.






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






37. 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.






38. 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






39. Short time - like 1 or 2 day sales






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






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






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






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






44. 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.






45. Financial debts incurred by a retailer






46. Net Profit/ Net Sales






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






48. 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






49. What the retailer owns in monetary value






50. Can be transformed simply and rapidly into cash