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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. 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






2. Net Profit After Taxes/ Total Assets






3. 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






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






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






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






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






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






9. Revenues received by a retailer






10. One that is just enough to move the goods






11. Original Retail price- markdown selling price






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






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






14. Financial debts incurred by a retailer






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. Improper displays - merchandise returns due to high pressure selling






17. 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






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






19. 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.






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






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






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






23. Buying errors - promotion errors - pricing errors - uncontrollable errors






24. 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.






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






26. What the retailer owns in monetary value






27. Evaluates the managament of capital






28. 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.






29. Current Assets/ Current Liabilities






30. 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.






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






32. Sales less cost of goods sold






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






34. 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






35. (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%






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






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






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






39. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)






40. Total Assets/ Net Worth






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






42. Price Lining - price zones - price ranges






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






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






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






46. Price is changed (up or down)






47. 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






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






49. 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






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







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