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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. Net Profit After Taxes/ Total Assets






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






3. 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






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






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






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






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






8. 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






9. Price is changed (up or down)






10. 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.






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






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






14. What the retailer owns in monetary value






15. Sales less cost of goods sold






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






17. The weather - merchandise is shopworn - economic downturn






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






19. 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.






20. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






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






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






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






26. 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






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






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






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






30. Total Assets/ Net Worth






31. 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






32. Original Retail price- markdown selling price






33. Costs involved in running the business






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






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






36. 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






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






38. 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.






39. Total Expenses/ Net Sales






40. Financial debts incurred by a retailer






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






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






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






44. Cost + Markup






45. 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.






46. Liabilities+ Owner's equity or net worth






47. (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%






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






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






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







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