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. Can be transformed simply and rapidly into cash






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






3. 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.






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






5. Current Liabilites/ 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. 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






8. Price is changed (up or down)






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






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. (Cash + Accounts Receivable) / Current Liabilities






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






13. Buying errors - promotion errors - pricing errors - uncontrollable errors






14. Net Profit After Taxes/ Net Worth






15. Liabilities+ Owner's equity or net worth






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






17. The weather - merchandise is shopworn - economic downturn






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






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






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






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






22. 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.






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






24. Short time - like 1 or 2 day sales






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






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






27. Evaluates the managament of capital






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






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






30. Sales less cost of goods sold






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






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






33. Financial debts incurred by a retailer






34. Net dollar markdown/ net dollar selling price






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






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






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






38. 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.






39. Revenues received by a retailer






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






41. What the retailer owns in monetary value






42. 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.






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






44. 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






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






46. One that is just enough to move the goods






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






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






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






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