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






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






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






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






5. Current Liabilites/ Net Worth






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






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






8. 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






9. Merchandise will sell at highest price longer period of time - appear exclusive - sale of goods at regular price is not disrupted - greater amount of goods can be accumulated and then marked down.






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






11. Total Expenses/ Net Sales






12. 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






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






14. The weather - merchandise is shopworn - economic downturn






15. 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






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






17. 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.






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






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






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






21. Financial debts incurred by a retailer






22. 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






23. Net Profit After Taxes/ Net Worth






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. 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






26. 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.






27. Net dollar markdown/ net dollar selling price






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. Total Assets/ Net Worth






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






31. Sales for the period/ average inventory






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






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






34. Net Profit/ Net Sales






35. Revenues received by a retailer






36. Evaluates the managament of capital






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






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






39. 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.






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






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






42. 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






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






44. Net Profit After Taxes/ Total Assets






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






46. 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






47. 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






48. What the retailer owns in monetary value






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






50. Short time - like 1 or 2 day sales