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. 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






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






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






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






5. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.






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






7. 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.






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






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






10. Sales less cost of goods sold






11. 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.






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






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






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






15. Net Profit After Taxes/ Net Worth






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






17. 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






18. Price Lining - price zones - price ranges






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






20. Net Profit/ Net Sales






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






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






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






24. Evaluates the managament of capital






25. Net Profit After Taxes/ Total Assets






26. What the retailer owns in monetary value






27. 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






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






29. 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






30. 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






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






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






33. Can be transformed simply and rapidly into cash






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






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






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






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






38. 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.






39. Financial debts incurred by a retailer






40. 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






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






42. Total Assets/ Net Worth






43. 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






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






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






46. 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






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






48. 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






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






50. 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.