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. (Cash + Accounts Receivable) / Current Liabilities






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






3. Financial debts incurred by a retailer






4. 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






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






6. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory






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






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






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






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






11. Price is changed (up or down)






12. Original Retail price- markdown selling price






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






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






15. Net Profit After Taxes/ Total Assets






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






17. Sales for the period/ average inventory






18. 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






19. Current Liabilites/ Net Worth






20. Can be transformed simply and rapidly into cash






21. Price Lining - price zones - price ranges






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






23. 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.






24. Net Profit After Taxes/ Net Worth






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






26. 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






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






28. 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.






29. 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






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






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






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






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






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. Evaluates the managament of capital






36. 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.






37. 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






38. The weather - merchandise is shopworn - economic downturn






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






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






41. One that is just enough to move the goods






42. 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.






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






44. 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






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






46. 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.






47. Net dollar markdown/ net dollar selling price






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






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






50. Cost + Markup