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






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






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






4. 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.






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






6. Net Profit After Taxes/ Total Assets






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






8. 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






9. 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






10. 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.






11. 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






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






13. Net Profit After Taxes/ Net Worth






14. 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






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






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






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






19. 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.






20. Sales less cost of goods sold






21. Current Assets/ Current Liabilities






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






23. 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






24. Revenues received by a retailer






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. 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






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






28. Sales for the period/ average inventory






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






30. (Cash + Accounts Receivable) / Current Liabilities






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






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






33. Net dollar markdown/ net dollar selling price






34. Wrong Merchandise - odd assortment colors/sizes - seasonal goods






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






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






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






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






39. Short time - like 1 or 2 day sales






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






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






42. 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






43. Financial debts incurred by a retailer






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






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






46. Net Profit/ Net Sales






47. Evaluates the managament of capital






48. Cost + Markup






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






50. 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