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






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






3. 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






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






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






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






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






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






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






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






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






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






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






14. 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






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






16. 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.






17. Can be transformed simply and rapidly into cash






18. Short time - like 1 or 2 day sales






19. Financial debts incurred by a retailer






20. Usually lower than original - but held for longer period






21. 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






22. Price Lining - price zones - price ranges






23. 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






24. 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






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






26. Cost + Markup






27. 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






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






29. 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.






30. Sales for the period/ average inventory






31. Current Liabilites/ Net Worth






32. Price is changed (up or down)






33. 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






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






35. Total Expenses/ Net Sales






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






37. What the retailer owns in monetary value






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






39. Evaluates the managament of capital






40. 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






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






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






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






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






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






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






47. The weather - merchandise is shopworn - economic downturn






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






49. Costs involved in running the business






50. 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