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






2. 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.






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






4. Total Assets/ Net Worth






5. 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






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






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






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






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






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






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






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






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. 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.






15. 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






16. 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






17. 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






18. Current Liabilites/ Net Worth






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






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






21. Cost + Markup






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






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






24. 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.






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






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






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






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






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






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






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






32. What the retailer owns in monetary value






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






34. 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






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






36. Financial debts incurred by a retailer






37. (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%






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






39. Can be transformed simply and rapidly into cash






40. 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






41. Liabilities+ Owner's equity or net worth






42. Net dollar markdown/ net dollar selling price






43. 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






44. One that is just enough to move the goods






45. 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






46. 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






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






48. 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






49. Sales less cost of goods sold






50. Sales for the period/ average inventory