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






2. Current Assets/ Current Liabilities






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






4. 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






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






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






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






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






9. Revenues received by a retailer






10. (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%






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






12. 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






13. Can be transformed simply and rapidly into cash






14. Net Profit/ Net Sales






15. Costs involved in running the business






16. Net Profit After Taxes/ Total Assets






17. Original Retail price- markdown selling price






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






19. 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.






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






21. One that is just enough to move the goods






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






23. Financial debts incurred by a retailer






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






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






26. (Cash + Accounts Receivable) / Current Liabilities






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






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






29. Sales less cost of goods sold






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






31. 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.






32. Total Assets/ Net Worth






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






34. 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






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






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






37. Cost + Markup






38. Evaluates the managament of capital






39. 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






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






41. 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






42. 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.






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






44. 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






45. Liabilities+ Owner's equity or net worth






46. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item






47. Dollar markup ($)/ cost price ($)






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






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






50. Price Lining - price zones - price ranges