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






2. Can be transformed simply and rapidly into cash






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






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






5. 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






6. Short time - like 1 or 2 day sales






7. 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.






8. Sales for the period/ average inventory






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






10. Total Assets/ Net Worth






11. 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






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. Net Profit After Taxes/ Total Assets






14. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.






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






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






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






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






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






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






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






22. 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






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






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






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






26. Liabilities+ Owner's equity or net worth






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






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






29. Current Liabilites/ Net Worth






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






31. What the retailer owns in monetary value






32. 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






33. Current Assets/ Current Liabilities






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






35. 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.






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






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






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






39. Costs involved in running the business






40. Net Profit/ Net Sales






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






42. 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






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






44. Buying errors - promotion errors - pricing errors - uncontrollable errors






45. 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.






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






47. The retailers financial condition at a specific point in time






48. 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






49. One that is just enough to move the goods






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