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. Cash Received by the retailer-cash leaving the retailer






2. 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






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






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






5. Costs involved in running the business






6. Liabilities+ Owner's equity or net worth






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






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






9. Cost + Markup






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






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






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






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






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






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






17. Financial debts incurred by a retailer






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






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






20. What the retailer owns in monetary value






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






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






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






24. The awareness of the consumer to what they perceive to be the window of cost within which they will buy a particular product or service






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






26. 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.






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






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






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






30. 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






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






32. 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.






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






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






35. 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.






36. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






38. 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






39. Evaluates the managament of capital






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






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






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






43. 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






44. Price is changed (up or down)






45. 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






46. Revenues received by a retailer






47. One that is just enough to move the goods






48. (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%






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






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