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






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






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






4. Net dollar markdown/ net dollar selling price






5. Costs involved in running the business






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






7. Sales for the period/ average inventory






8. 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






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






10. 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






11. 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






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






13. Can be transformed simply and rapidly into cash






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






15. 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






16. Financial debts incurred by a retailer






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






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






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






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






21. Liabilities+ Owner's equity or net worth






22. 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.






23. Total Assets/ Net Worth






24. 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.






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






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






27. Price is changed (up or down)






28. 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






29. 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






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






31. Price Lining - price zones - price ranges






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






33. 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






34. The weather - merchandise is shopworn - economic downturn






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






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






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






38. One that is just enough to move the goods






39. Current Assets/ Current Liabilities






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






41. 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






42. Evaluates the managament of capital






43. 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.






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






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






46. Revenues received by a retailer






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






48. Short time - like 1 or 2 day sales






49. 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






50. Total Expenses/ Net Sales