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. Revenues received by a retailer






2. 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






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






4. Price Lining - price zones - price ranges






5. Sales for the period/ average inventory






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






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






8. (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%






9. Price is changed (up or down)






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






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






12. 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






13. 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.






14. 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






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






16. 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






17. Buying errors - promotion errors - pricing errors - uncontrollable errors






18. Short time - like 1 or 2 day sales






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






20. Merchandise will sell at highest price longer period of time - appear exclusive - sale of goods at regular price is not disrupted - greater amount of goods can be accumulated and then marked down.






21. 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






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






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






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






25. Current Assets/ Current Liabilities






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






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






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






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






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. Evaluates the managament of capital






32. 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






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






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






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






37. Original Retail price- markdown selling price






38. The energizing force that fuels and sustains our economic system






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






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






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






42. 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






43. Financial debts incurred by a retailer






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






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






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






47. Net Profit After Taxes/ Total Assets






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






49. 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






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