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






2. Revenues received by a retailer






3. Net dollar markdown/ net dollar selling price






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






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






6. 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






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






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






9. (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%






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






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






12. 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.






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






14. Financial debts incurred by a retailer






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






16. Cost + Markup






17. One that is just enough to move the goods






18. 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






19. Costs involved in running the business






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






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






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






23. 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






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






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






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. Cash Received by the retailer-cash leaving the retailer






28. Net Profit After Taxes/ Net Worth






29. Evaluates the managament of capital






30. Liabilities+ Owner's equity or net worth






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






32. 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






33. Buying errors - promotion errors - pricing errors - uncontrollable errors






34. 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






35. Can be transformed simply and rapidly into cash






36. 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.






37. Net Profit After Taxes/ Total Assets






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






39. 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.






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






41. 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.






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






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






44. Short time - like 1 or 2 day sales






45. Price Lining - price zones - price ranges






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






47. 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






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






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. First price or Manufacturers suggestet Retal Price (MSRP)