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






2. 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.






3. Cost + Markup






4. One that is just enough to move the goods






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. Net Profit After Taxes/ Net Worth






7. 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.






8. 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.






9. Price Lining - price zones - price ranges






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






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






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






13. 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






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






15. Wrong Merchandise - odd assortment colors/sizes - seasonal goods






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






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






18. Can be transformed simply and rapidly into cash






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






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






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






22. Original Retail price- markdown selling price






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






24. (Cash + Accounts Receivable) / Current Liabilities






25. Financial debts incurred by a retailer






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






27. (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%






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






29. 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






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. The number of items remaining in stock x dollar markdown






32. Short time - like 1 or 2 day sales






33. 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






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. Sales less cost of goods sold






36. Price is changed (up or down)






37. 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






38. 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






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






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






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






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






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






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






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






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






47. Current Liabilites/ Net Worth






48. 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






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






50. The weather - merchandise is shopworn - economic downturn