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. 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






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






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






5. Total Assets/ Net Worth






6. 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.






7. 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






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






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






10. Financial debts incurred by a retailer






11. Sales less cost of goods sold






12. Total Expenses/ Net Sales






13. Sales for the period/ average inventory






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






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






16. 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.






17. Original Retail price- markdown selling price






18. Price is changed (up or down)






19. Current Liabilites/ Net Worth






20. 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






21. 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






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






23. 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






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. Cash Received by the retailer-cash leaving the retailer






26. The weather - merchandise is shopworn - economic downturn






27. 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.






28. Price Lining - price zones - price ranges






29. Cost + Markup






30. 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.






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






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






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






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






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






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






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






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






39. Evaluates the managament of capital






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






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






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






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






44. Short time - like 1 or 2 day sales






45. One that is just enough to move the goods






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






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






48. Net dollar markdown/ net dollar selling price






49. What the retailer owns in monetary value






50. 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