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






2. Sales less cost of goods sold






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






4. Net dollar markdown/ net dollar selling price






5. (Cash + Accounts Receivable) / Current Liabilities






6. Net Profit/ Net Sales






7. Current Assets/ Current Liabilities






8. Price Lining - price zones - price ranges






9. 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






10. (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%






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






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






13. Short time - like 1 or 2 day sales






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






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






16. 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.






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






18. The weather - merchandise is shopworn - economic downturn






19. One that is just enough to move the goods






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






21. Assets collected within one year. Due to the widespread use of credit cards - AR for retailers has diminished with exceptions such as lay-a-way.






22. Buying errors - promotion errors - pricing errors - uncontrollable errors






23. Costs involved in running the business






24. Net Profit After Taxes/ Total Assets






25. 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






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






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






28. What the retailer owns in monetary value






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






30. Financial debts incurred by a retailer






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






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






33. Liabilities+ Owner's equity or net worth






34. 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






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






36. 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






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






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






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






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






41. 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






42. 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.






43. 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






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






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






46. 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






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






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






49. Original Retail price- markdown selling price






50. 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.