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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. Usually lower than original - but held for longer period






2. 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.






3. 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.






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






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






6. 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






7. 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.






8. What the retailer owns in monetary value






9. 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






10. Buying errors - promotion errors - pricing errors - uncontrollable errors






11. Original Retail price- markdown selling price






12. Sales less cost of goods sold






13. 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






14. One that is just enough to move the goods






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






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






17. Net dollar markdown/ net dollar selling price






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






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






20. Can be transformed simply and rapidly into cash






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






22. 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






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






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






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






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






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






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






29. 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






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






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






32. Sales for the period/ average inventory






33. 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






34. Evaluates the managament of capital






35. Costs involved in running the business






36. 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.






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. 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






39. Cost + Markup






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. 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






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






43. (Cash + Accounts Receivable) / Current Liabilities






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






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






46. Total Assets/ Net Worth






47. 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.






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






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






50. Net Profit After Taxes/ Total Assets







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