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. 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






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






4. Cost + Markup






5. Can be transformed simply and rapidly into cash






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






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






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






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






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






11. Liabilities+ Owner's equity or net worth






12. Sales for the period/ average inventory






13. Evaluates the managament of capital






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






15. Price is changed (up or down)






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






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






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






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






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






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






22. Sales less cost of goods sold






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






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






25. 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






26. 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






27. 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






28. Total Assets/ Net Worth






29. Net Profit/ Net Sales






30. 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.






31. 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.






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






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






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






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






37. 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






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






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






40. Net dollar markdown/ net dollar selling price






41. Financial debts incurred by a retailer






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






43. 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.






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. 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.






46. Costs involved in running the business






47. 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






48. 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






49. The weather - merchandise is shopworn - economic downturn






50. Net Profit After Taxes/ Total Assets