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 dollar markdown/ net dollar selling price






2. Sales for the period/ average inventory






3. 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






4. Current Assets/ Current Liabilities






5. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)






6. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)






7. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






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






10. Financial debts incurred by a retailer






11. 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






12. (Cash + Accounts Receivable) / Current Liabilities






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






14. The weather - merchandise is shopworn - economic downturn






15. Short time - like 1 or 2 day sales






16. 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






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






18. 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.






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






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






21. 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






22. Revenues received by a retailer






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






24. Net Profit/ Net Sales






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






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






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






28. 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






29. Merchandise Available for sale at cost/ Merchandise available for sale at retail






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






31. Net Profit After Taxes/ Net Worth






32. 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






33. 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.






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






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






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






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






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






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






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






41. Net Profit After Taxes/ Total Assets






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






43. 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.






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






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






46. What the retailer owns in monetary value






47. 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






48. 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






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






50. 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.