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






2. Revenues received by a retailer






3. 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






4. (Cash + Accounts Receivable) / Current Liabilities






5. 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.






6. 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.






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






8. Net Profit After Taxes/ Total Assets






9. Price Lining - price zones - price ranges






10. 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






11. One that is just enough to move the goods






12. Original Retail price- markdown selling price






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






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






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






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






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






18. Net dollar markdown/ net dollar selling price






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






20. 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






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






22. Total Expenses/ Net Sales






23. 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






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






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






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






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






28. Liabilities+ Owner's equity or net worth






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






30. (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%






31. Price is changed (up or down)






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






33. 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






34. 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.






35. The weather - merchandise is shopworn - economic downturn






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






37. Buying errors - promotion errors - pricing errors - uncontrollable errors






38. 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






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






40. 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.






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






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






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






44. 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






45. Sales for the period/ average inventory






46. 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.






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






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






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






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







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