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Retail Financials

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. Merchandise Available for sale at cost/ Merchandise available for sale at retail






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






3. 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






4. The weather - merchandise is shopworn - economic downturn






5. 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.






6. 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






7. Cost + Markup






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






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






10. 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






11. Price is changed (up or down)






12. 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






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






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






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. First price or Manufacturers suggestet Retal Price (MSRP)






17. Short time - like 1 or 2 day sales






18. Net Profit/ Net Sales






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






20. Current Liabilites/ Net Worth






21. Net dollar markdown/ net dollar selling price






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






23. Total Expenses/ Net Sales






24. 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.






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






26. 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






27. 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.






28. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






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






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






33. Evaluates the managament of capital






34. Original Retail price- markdown selling price






35. What the retailer owns in monetary value






36. Liabilities+ Owner's equity or net worth






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






38. 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






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






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






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






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






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






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






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






46. 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






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






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






49. Total Assets/ Net Worth






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







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