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. 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






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






3. Evaluates the managament of capital






4. 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






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






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






7. 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






8. Net Profit After Taxes/ Total Assets






9. Total Assets/ Net Worth






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






11. 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






12. 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






13. 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.






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






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






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






17. One that is just enough to move the goods






18. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






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






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






23. Costs involved in running the business






24. 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






25. Cost + Markup






26. 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.






27. 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






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






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






30. Can be transformed simply and rapidly into cash






31. Sales less cost of goods sold






32. Based on a calculation commonly represented as a percentage - comparing the amount of inventory a retailer receives from a manufacturer or supplier against what is actually sold to the consumer






33. Current Assets/ Current Liabilities






34. 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.






35. The weather - merchandise is shopworn - economic downturn






36. Net Profit After Taxes/ Net Worth






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






38. Price Lining - price zones - price ranges






39. Price is changed (up or down)






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






41. 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






42. Short time - like 1 or 2 day sales






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






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






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






46. 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.






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






48. 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.






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






50. Sales for the period/ average inventory