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. Net Profit/ Net Sales






2. 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






3. (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%






4. Sales for the period/ average inventory






5. Net Profit After Taxes/ Net Worth






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






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






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






9. Total Assets/ Net Worth






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






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






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






14. Current Liabilites/ Net Worth






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






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






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






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






19. 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.






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






21. 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






22. The weather - merchandise is shopworn - economic downturn






23. 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.






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






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






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






27. What the retailer owns in monetary value






28. 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.






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






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






31. One that is just enough to move the goods






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






33. Costs involved in running the business






34. Sales less cost of goods sold






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






36. Original Retail price- markdown selling price






37. Price is changed (up or down)






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






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






40. Evaluates the managament of capital






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






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






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






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






45. 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






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






48. 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






49. Cost + Markup






50. 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