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. 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






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






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






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






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






6. One that is just enough to move the goods






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






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






9. 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






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






11. 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






12. Buying errors - promotion errors - pricing errors - uncontrollable errors






13. 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.






14. The weather - merchandise is shopworn - economic downturn






15. 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.






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






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. 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






19. 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






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






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






22. Sales for the period/ average inventory






23. Liabilities+ Owner's equity or net worth






24. Net Profit/ Net Sales






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






26. 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






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






28. 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.






29. Price is changed (up or down)






30. Evaluates the managament of capital






31. 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






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






33. Current Assets/ Current Liabilities






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






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






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






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






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






39. 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






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






41. Costs involved in running the business






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






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






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






45. Financial debts incurred by a retailer






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






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






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






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






50. Cost + Markup