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






3. What the retailer owns in monetary value






4. Net dollar markdown/ net dollar selling price






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






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






7. Cost + Markup






8. Price is changed (up or down)






9. Price Lining - price zones - price ranges






10. 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






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






12. 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






13. Total Assets/ Net Worth






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






15. Sales for the period/ average inventory






16. 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.






17. One that is just enough to move the goods






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






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






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






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






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






23. 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






24. Net Profit After Taxes/ Net Worth






25. Costs involved in running the business






26. 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






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






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






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






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






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






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






33. 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.






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






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






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. 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






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






40. Current Liabilites/ Net Worth






41. 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.






42. 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.






43. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






45. 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






46. 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.






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






48. Can be transformed simply and rapidly into cash






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






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