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






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






3. Sales less cost of goods sold






4. Total Assets/ Net Worth






5. 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






6. 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






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






8. Cost + Markup






9. 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






10. 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.






11. 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






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






13. Sales for the period/ average inventory






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






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






17. Buying errors - promotion errors - pricing errors - uncontrollable errors






18. 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.






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






20. Evaluates the managament of capital






21. 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.






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






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






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






25. The weather - merchandise is shopworn - economic downturn






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






27. 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.






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






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






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






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






32. Liabilities+ Owner's equity or net worth






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






34. 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






35. 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






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






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






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






39. One that is just enough to move the goods






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






41. Short time - like 1 or 2 day sales






42. Current Liabilites/ Net Worth






43. 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






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






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






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






47. Total Markup on all goods on hand/ retail price of all goods on hand






48. Net Profit After Taxes/ Total Assets






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






50. 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