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






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






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






4. 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






5. Current Assets/ Current Liabilities






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






7. Cost + Markup






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






9. 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.






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






11. 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






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






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






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






15. 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






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






17. Evaluates the managament of capital






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






19. Costs involved in running the business






20. 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.






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






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






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






24. Short time - like 1 or 2 day sales






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






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






27. 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






28. Revenues received by a retailer






29. 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.






30. Net Profit After Taxes/ Net Worth






31. 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






32. Net dollar markdown/ net dollar selling price






33. What the retailer owns in monetary value






34. Net Profit After Taxes/ Total Assets






35. 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






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






37. Price Lining - price zones - price ranges






38. Can be transformed simply and rapidly into cash






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






40. Liabilities+ Owner's equity or net worth






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






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






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






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






45. Buying errors - promotion errors - pricing errors - uncontrollable errors






46. 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






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






48. Sales for the period/ average inventory






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






50. 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