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. Usually lower than original - but held for longer period






2. Liabilities+ Owner's equity or net worth






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






4. Cash Received by the retailer-cash leaving the retailer






5. 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.






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






7. Price Lining - price zones - price ranges






8. 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.






9. 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






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






11. 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






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






13. Total Assets/ Net Worth






14. Cost + Markup






15. 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.






16. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model






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






18. What the retailer owns in monetary value






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






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






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






22. 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






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






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






25. Buying errors - promotion errors - pricing errors - uncontrollable errors






26. Financial debts incurred by a retailer






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






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






29. Sales for the period/ average inventory






30. Short time - like 1 or 2 day sales






31. Current Assets/ Current Liabilities






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






33. Net Profit After Taxes/ Net Worth






34. 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






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






36. Net Profit/ Net Sales






37. 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






38. Evaluates the managament of capital






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






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






41. 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






42. Current Liabilites/ Net Worth






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






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






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






46. 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






47. 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






48. Sales less cost of goods sold






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






50. Total Expenses/ Net Sales