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






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






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






5. 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






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






7. (Cash + Accounts Receivable) / Current Liabilities






8. Costs involved in running the business






9. Current Liabilites/ Net Worth






10. 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






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






12. 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






13. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






15. 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






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






17. Total Assets/ Net Worth






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






19. 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






20. 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






21. 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






22. 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.






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






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






25. Cost + Markup






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






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






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






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






31. Financial debts incurred by a retailer






32. Liabilities+ Owner's equity or net worth






33. Net Profit After Taxes/ Net Worth






34. Sales less cost of goods sold






35. 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






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






37. Current Assets/ Current Liabilities






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






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






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






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






42. 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






43. Original Retail price- markdown selling price






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






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






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






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






48. Price Lining - price zones - price ranges






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






50. Short time - like 1 or 2 day sales