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






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






3. Price Lining - price zones - price ranges






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






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






6. 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






7. 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






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






9. Current Assets/ Current Liabilities






10. Revenues received by a retailer






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






12. Sales less cost of goods sold






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






14. (Cash + Accounts Receivable) / Current Liabilities






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






16. 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






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






18. (planned expenses + planned operating profit + planned stock shortages + markdowns + employee and customer discounts) / (planned net sales + stock shortages + markdowns + employee and customer discounts) x 100%






19. 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






20. 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.






21. What the retailer owns in monetary value






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






23. Evaluates the managament of capital






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






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






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. 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.






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






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






30. Original Retail price- markdown selling price






31. 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.






32. 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






33. Short time - like 1 or 2 day sales






34. 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






35. 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.






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






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






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






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






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






41. Net dollar markdown/ net dollar selling price






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






43. 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






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






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






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






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






48. Buying errors - promotion errors - pricing errors - uncontrollable errors






49. The energizing force that fuels and sustains our economic system






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