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. 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






2. 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.






3. 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






4. Price is changed (up or down)






5. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






7. Net Profit/ Net Sales






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






9. Original Retail price- markdown selling price






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






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






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






13. Costs involved in running the business






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






15. 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






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






17. Financial debts incurred by a retailer






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






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






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






21. Evaluates the managament of capital






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






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






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






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






26. The weather - merchandise is shopworn - economic downturn






27. 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






28. Net dollar markdown/ net dollar selling price






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






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






31. Cost + Markup






32. Net Profit After Taxes/ Net Worth






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






34. 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.






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






36. (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%






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






38. One that is just enough to move the goods






39. Net Profit After Taxes/ Total Assets






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






41. Sales for the period/ average inventory






42. 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






43. Short time - like 1 or 2 day sales






44. 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






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






46. Revenues received by a retailer






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






48. Price Lining - price zones - price ranges






49. Liabilities+ Owner's equity or net worth






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